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January PCE Higher Than Expected


Stock index futures are lower in response to the January personal consumption expenditures report coming in higher than expected. Personal consumption expenditures were up 1.8% when an increase of 1.2% was anticipated. Personal income in January increased 0.6% when a 1.0% gain was anticipated.

The 9:00 central time January new home sales report is anticipated to show 617,000.

The 9:00 February consumer sentiment index is predicted to be 66.4.


The U.S. dollar index advanced in light of the personal consumption expenditures report coming in higher than predicted.

The euro currency is lower on news that the German economy shrank 0.4% on quarter in the last quarter of 2022, which is much worse than the initial estimate of a 0.2% decline. This marks the first drop in GDP in almost two years.

Japanese consumer inflation increased as expected in January. The national core consumer price index, which excludes volatile items such as fresh food, increased 4.2% in January, compared to 4.0% in the prior month.


There was a one-day reversal to the upside in yesterday’s trade in the March 30-year Treasury bond futures.

However, futures came under pressure today when the stronger than estimated personal consumption expenditures report was released.

Loretta Mester of the Federal Reserve repeated her view that she saw a good case for a 50 basis point increase at the last Federal Open Market Committee meeting.

Federal Reserve speakers today Loretta Mester at 9:15, James Bullard at 10:30, Susan Collins at 12:30 and Christopher Waller at 12:30.

Most likely the Federal Open Market Committee will increase its fed funds rate by 25 basis points at its March 22 policy meeting, and there is more talk of another 25 basis point hike at the May meeting.

There has been lots of hawkish Fed speak lately, while the severely inverted yield curve is getting very little attention.


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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.

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