European Markets to Follow US Yields Higher Today

The European financial markets will open in the next couple of ours and look to be on the higher side of things. The US Dollar is near its thirteen and a half high and US Treasury yields continue to inch higher. Investors are gearing up that President-elect Donald Trump will stoke inflation.

As of the time of this report, the futures of the London FTSE 100 ae up 26 points to 6,780. Stocks in France are up 25 points to 4,537 and in Germany, futures are up nearly 40 points to 10,745.

This morning, during the Asian trading session, the US Dollar index, which measures the buck against a basket of currencies, was trading around $99.88. It had hit a high of $100.22 earlier in the session. Should, the Dollar Index break the key level of 100.50, the December 2015 high, this would be the Dollar index’s highest level since 2003.

Treasuries Support European Stocks

European investors are also watching US Treasury yields today as the benchmark 10 year bond continues to inch higher.

Traders in Europe are watching Trump’s economic policies very closely to see how they will affect the Federal Reserve’s monetary policy. He has said he plans to spend heavily on infrastructure and cut taxes in order to stimulate the world’s largest economy. An increase in fiscal stimulus could have an impact on the Federal Reserve’s path of interest rate hikes.

There were a number of Fed speakers on Monday about Trump’s policies. Jeffrey Lacker, head of the Richmond Fed, said that a “more stimulative fiscal stance” would “bolster the case for raising rates.”