Written Commentary
STOCK INDEX FUTURES
Stock index futures are rebounding today after the three major averages declined more than 1.0% in the previous session as the higher-than-expected U.S. inflation report reduced prospects that the Federal Open Market Committee will lower interest rates soon.
Despite yesterday’s consumer price index inspired selling, the fundamentals and technicals remain supportive to stock index futures.
CURRENCY FUTURES
The U.S. dollar index is a little lower.
Interest rate differentials remain supportive to the greenback.
The euro zone fourth quarter gross domestic product on a quarter-to-quarter basis was unchanged as anticipated.
Euro zone industrial production increased 2.6% on month in December when a 0.2% decline was predicted.
Annual U.K inflation unexpectedly held steady at 4.0% in January when economists had forecast an increase in the annual rate to 4.2%. This paves the way for the Bank of England to start cutting borrowing costs from their 16-year high. There is approximately a 72% probability that the BoE will lower its key interest rate in June.
INTEREST RATE MARKET FUTURES
Futures are steady at the front of the curve and a little higher at the long end of the curve.
The yield on the U.S. 10-year Treasury note increased to around 4.30%.
Federal Reserve speakers today are Austan Goolsbee at 8:30 central time and Michael Barr at 3:00.
Financial futures markets are predicting there is an 8.0% probability that the Federal Open Market Committee will lower its fed funds rate by 25 basis points at the March 20 meeting, and there is a 92% chance that the Fed will keep rates unchanged.
The fundamentals and technicals are not encouraging for the bullish case.
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.
