US equity futures fell on Monday as slowing economic growth and sticky inflation continued to handicap markets.
S&P 500 futures fell 0.74%; Futures on the Nasdaq 100 fell 0.79%; Futures on the Dow Jones Industrial Average fell 0.66%.
In the US and elsewhere, signs of economic weakness are becoming more apparent in everything from personal spending to manufacturing. Investors are increasingly fretting about recession and its implications rather than focusing exclusively on elevated price pressures.
Financial markets “remain focused on the risk of a sharp slowdown in the global economy,” Carol Kong, a strategist at Commonwealth Bank of Australia, wrote in a note. She added that backdrop could bolster the dollar this week.
Yet minutes of the Fed's June policy meeting on Wednesday are almost certain to sound hawkish given the committee chose to hike rates by a super-sized 75 basis points.
The market is pricing in around an 85% chance of another hike of 75 basis points this month and rates at 3.25-3.5% by year end.
"But the market has also moved to price in an increasingly aggressive rate cut profile for the Fed into 2023 and 2024, consistent with a growing chance of recession," noted analysts at NAB.
"Around 60bps of Fed cuts are now priced in for 2023."
In currencies, investor demand for the most liquid safe harbour has tended to benefit the U.S. dollar, which is near two-decade highs against a basket of competitors at 105.100 .