Written Commentary
STOCK INDEX FUTURES
U.S. stock index futures are mixed with tech stocks continuing to rebound.
Federal Reserve Chairman Jerome Powell will make a virtual appearance at a European Central Bank forum on central banking this morning.
Jobless claims in the week ended November 11 were 709,000 when 737,000 were expected.
The October consumer price index was unchanged when an increase of 0.2% was expected and the consumer price index, excluding food and energy, was unchanged, which compares to the anticipated 0.2% gain.
The technical picture remains positive for stock index futures.
CURRENCY FUTURES
The U.S. dollar is lower and remains in a five-day flag congestion pattern.
The greenback has been weakening since May amid rising debt levels coupled with expectations for an extended period of low interest rates.
Longer term, the U.S. dollar is likely to drift lower.
The euro currency is higher despite news that economic data showed euro zone industrial output unexpectedly declined in September.
The European Union’s statistics agency said production at the euro zone’s factories, mines and utilities was 0.4% lower than in August. This decline was a surprise since economists forecast an increase of 0.8%.
The British pound is lower on weaker than expected gross domestic product data. Britain’s economy grew by only 1.1% in September, which compares to the market consensus estimate of 1.5% expansion.
INTEREST RATE MARKET FUTURES
Yesterday the 30-year Treasury bond futures fell to the lowest level since April. However, there is some recovery today.
The Treasury will auction 30-year bonds today.
Other Federal Reserve speakers today are Randal Quarles at 11:00, Charles Evans at 12:00 and John Williams at 1:00.
Financial futures markets are predicting there is a 95.9% probability that the Federal Open Market Committee will keep its fed funds rate unchanged at the December 16 policy meeting.
The yield curve is likely to steepen, which should put pressure on the futures at the long end of the curve, especially the 30-year Treasury bond futures, while futures at the short end of the curve are likely to hold steady.
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.
