Inflation & Interest Rates

Good morning. Following yesterday's malaise, the market has turned more defensive this morning following heightened inflation and interest rate concerns. The European Central Bank (ECB) increased its interest rates today and the report on labor costs and productivity was not inflation-friendly. According to Fed fund futures, traders now see a 12% chance the Fed will lower interest rates to 5% by year-end compared with odds of 98% just one month ago. That's quite a large sentiment change.

After the open we have the weekly EIA Petro Report at 10:30 but the key for the day is whether the buy-the-dip crowd resurfaces following a poor start to trading. Have a good day!