US pre-open: Stocks set for marginally higher start; Fed speak eyed

US futures pointed to a slightly higher open on Wall Street as worries about Deutsche Bank receded, with investors looking ahead to more Fed speak on an otherwise quiet day.

At 1130 BST, Dow Jones Industrial Average and S&P 500 futures were up 0.2%, while Nasdaq futures were 0.2% firmer.

Jamieson Blake, retail sales manager at ADS Securities London, said: “After yesterday’s rather subdued session on Wall Street, major US indices are eyeing modest gains at the open. It’s a relatively quiet day in terms of economic data with only some low-level releases expected from the US shortly after the opening bell.

“Fears over Deutsche Bank continue to ebb and although there’s still some risk here, markets have rejected the fear we saw at the end of last week – something that’s reflected in the VIX volatility index as it trends back to summer lows.

“That far better than expected US ISM manufacturing reading yesterday is worthy of note as the overshoot plays very much into the hands of rate hawks at the Federal Reserve. When we do see that rate hike come through, stocks on a global basis will likely find themselves rattled.”

On Friday, US-listed shares in Deutsche Bank surged after a media report suggested its fine from the US Department of Justice could be reduced from $14bn to $5.4bn. On Monday, the Wall Street Journal said talks between the two were ongoing and no settlement has been reached.

Meanwhile, oil prices retreated. West Texas Intermediate was down 0.7% to $48.48 a barrel and Brent crude was 0.6% lower at $50.60.

In currency markets, the pound slumped to a 31-year low against the dollar as UK Prime Minister Theresa May’s pledge to trigger Article 50 by March continued to weigh on the currency. Sterling dropped to $1.2764 from $1.2858 late in New York on Monday.

There are no major US data releases due, but investors will watch for a speech by Richmond Fed President Jeffrey Lacker at a conference in West Virginia on the economic outlook. Chicago Fed President Charles Evans is also due to speak at an event in New Zealand.

In corporate news, Olive Garden parent Darden Restaurants was due to report earnings before the open.