Positive corporate earnings from UK industrial companies gave FTSE futures a slight boost to 7, US stock futures declined on Tuesday morning with Wall Street worried a government shutdown could begin as soon as Wednesday. Given the strength in the US dollar, hedging long equity positions with currency derivatives is a prudent move. The dollar index (DXY) continues to test its summer highs, which typically acts as a headwind for earnings of US multinational corporations. Buying puts on the EUR/USD or going long DXY futures could protect portfolios from a scenario where equities lose steam and the dollar continues to climb. FTSE futures remained steady at 7,862, with traders awaiting critical UK employment data tomorrow. Labour market trends will be pivotal in shaping near-term monetary policy outlooks.
