Written Commentary
STOCK INDEX FUTURES
Stock index futures are mixed today after substantial gains yesterday.
There are no major economic reports scheduled for today.
The main event this week will be Friday’s Federal Reserve Chair Powell’s speech at the Kansas City Federal Reserve’s annual Jackson Hole Economic Symposium. It is likely that Powell will indicate the Fed is ready to lower its fed funds rate at its September 18 meeting.
Futures are performing better than the news would suggest, indicating traders are looking beyond recent economic reports to some other not yet obvious bullish fundamental.
CURRENCY FUTURES
The U.S. dollar index declined to its lowest level since January.
The euro area annual inflation rate was 2.6% in July 2024, which is up from 2.5% in June. A year ago the rate was 5.3%.
The European Central Bank and the Bank of England are expected to lower key interest rates this year.
The trade surplus in Switzerland narrowed in July from a downwardly revised report in the previous month, marking the smallest trade surplus since April.
INTEREST RATE MARKET FUTURES
Futures are higher.
Federal Reserve speakers today are Raphael Bostic at 12:35 central time and Michael Barr at 1:45.
There is a 74% probability that the Federal Open Market Committee will lower its that funds rate by 25 basis points at its September 18 meeting, and there is a 26% probability that the FOMC will reduce its key interest rate by 50 basis points in September.
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