Written Commentary
STOCK INDEX FUTURES
Stock index futures are higher despite deadlocked stimulus talks in Washington.
The September S&P 500 futures are closing in on the record high at 3396.50.
Jobless claims in the week ended August 8 were 963,000 when 1,150,000 were expected.
The technical picture remains constructive for stock index futures.
CURRENCY FUTURES
The U.S. dollar is lower. The greenback weakened in spite of the better than expected U.S. jobless claims report, which should be viewed as sign of weakness.
Some of the bears on the U.S. dollar are speculating that the Federal Reserve may loosen its approach to inflation, which could happen at its next policy meeting in September.
The U.S. dollar is likely to drift lower from current levels.
German consumer prices in July fell 0.5% month over month as measured both by national standards and by E.U.-harmonized standards. Both were in line with forecasts.
The Australian dollar is higher after a report showed Australia’s economy created 114,700 jobs in July.
INTEREST RATE MARKET FUTURES
Futures came under limited pressure when the smaller than anticipated U.S. jobless claims report was released.
Interest rate market futures, especially at the short end of the curve are likely to be supported by ideas that major central banks, including the Federal Reserve, will keep interest rates low for an extended period.
Raphael Bostic of the Federal Reserve will speak at 10:00 central time.
The Federal Reserve will auction $26 billion of 30-year bonds today wrapping up a week that will see the U.S. raise $112 billion.
The next Federal Open Market Committee meeting is scheduled for September 16. Financial futures markets are predicting there is a 90% probability that the FOMC will maintain its fed funds target rate at zero to 25 basis points.
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