U.S. stock futures edge higher ahead of key speech from Fed’s Brainard

What’s driving markets

A sharp surge in Treasury yields pressured stocks on Tuesday. The benchmark 10-year yield
TMUBMUSD10Y,
3.314%
rose 15 basis points, the largest one-day climb in a month.

The U.S. dollar
DXY,
+0.25%
hit a new 20-year high on Wednesday.

That’s as investors assess the latest data on the U.S. economy, as well as the efforts by European governments to cap a spike in energy prices. A surprisingly strong ISM services index moved markets, even as a related measure produced by S&P Global fell to its worst level since May 2020.

Brainard hasn’t talked about the economy in depth since April. Chair Jerome Powell participates in a moderated discussion on Thursday, and Fed Gov. Christopher Waller is due to speak on Friday. “The Fed speaker schedule this week looks designed to give us heavy guidance ahead of the blackout period, and I suspect that guidance will favor a 75bp move in September,” said Tim Duy, chief U.S. economist at SGH Macro Advisors.

The Fed’s own Beige Book of economic anecdotes is due for release at 2 p.m. Eastern.

The Bank of Canada could lift rates by as much as 100 basis points, in a decision due to be announced at 10 a.m. Eastern. The European Central Bank on Thursday could lift rates as much as 75 basis points on Thursday.