Written Commentary
CURRENCY FUTURES
The U.S. dollar index is higher and is hovering near its highest level in almost two months. Hawkish Federal Reserve comments continue to support the greenback. In addition, the flight to quality influence Is supporting the greenback in light of political turmoil in Europe and ongoing tensions in the Middle East.
The GfK Consumer Climate Indicator for Germany declined to -21.8 heading into July from a slightly revised -21.0 in the previous period, missing market predictions of -18.9 and marking the first decline in five months.
The monthly retail sales balance from the Confederation of British Industry, which measures sales compared to the previous year, declined to -24 in June 2024 from 8 in May, missing market estimates of 1.
Australian consumer inflation accelerated to a six-month high in May. Data from the Australian Bureau of Statistics showed its monthly consumer price index increased at an annual pace of 4.0% in May, which is well above market forecasts of 3.8%.
The Japanese yen weakened to 160.31 to the U.S. dollar, which is the lowest since 1986.
STOCK INDEX FUTURES
Stock index futures are lower in response to hawkish rhetoric from several Federal Reserve officials.
The 9:00 central time May new home sales report is expected to show 650,000.
The longer term fundamentals remain supportive to stock index futures.
INTEREST RATE MARKET FUTURES
Prices are lower due to hawkish comments from Federal Reserve officials.
The U.S. Treasury will auction five-year notes.
Financial futures markets are predicting there is a 64% probability that the Federal Open Market Committee will lower its fed funds rate by 25 basis points at its September 18 meeting.
Despite many Fed officials predicting only one fed funds rate reduction this year, and some predicting no rate cuts this year, financial futures markets are suggesting there will be two 25 basis point rate cuts in 2024.
The September 30-year Treasury bond futures remain in an eight-day congestion pattern.
The long term fundamentals are bullish on balance, especially for futures at the long end of the yield curve.
Interested in more futures markets? Explore our Market Dashboards here.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.
