Dow Jones & Nasdaq 100: BoJ Hike Steadies US Futures in Asia

Michigan Inflation Expectations in Focus

US futures were mixed during the Asian morning session on Friday, December 19. The Nasdaq 100 E-mini and the S&P 500 E-mini advanced 52 points and 5 points, respectively, while the Dow Jones E-mini fell 78 points.

Later on Friday, finalized consumer sentiment and inflation expectation figures will influence risk sentiment. According to the preliminary report, the Michigan Consumer Sentiment Index rose from 51.0 in November to 53.4 in December, while 1-year inflation expectations fell from 4.5% to 4.1%.

A softer 1-year inflation expectations reading would signal a pullback in consumer spending. Typically, consumers curb spending on the expectation of lower prices for goods in the future. Weaker spending would ease demand-driven inflation, supporting a more dovish Fed rate path and a bullish price outlook for US equity futures.

According to the CME FedWatch Tool, the probability of a March Fed rate cut increased from 53.9% on December 17 to 58.5% on December 18. Softer headline US inflation numbers for November lifted bets on a March rate cut, underscoring market sensitivity to US price data.

Key Technical Levels for Dow Jones, Nasdaq 100, and S&P 500

Despite the mixed Friday morning session, the Dow Jones E-mini, the Nasdaq 100 E-mini, and the S&P 500 E-mini remained above their 50-day and 200-day EMAs. The EMAs signaled a bullish bias.

Near-term trends will hinge on US data, JGB yields, USD/JPY price trends, and BoJ Governor Kazuo Ueda’s upcoming press conference. Key levels to monitor include:

Dow Jones

• Resistance: 48,500, the December 12 record high of 48,917, and then 49,000.
• Support: 48,000, 47,500, and then the 50-day EMA (47,375).