Written Commentary
STOCK INDEX FUTURES
Major stock indexes around the world were lower amid concerns about an escalation of the Middle East conflicts.
The bearish impact of fears of a wider conflict in the Middle East is being partially offset by prospects of a less hawkish Federal Reserve.
There are no major economic reports scheduled for today.
CURRENCY FUTURES
The U.S. dollar is steady.
There has been only a limited flight-to-quality flow of funds into the greenback.
The U.S. dollar continues to underperform the news.
German producer prices posted their biggest year-on-year decline in September since data collection first started in 1949. Producer prices fell slightly more than expected in September, decreasing by 14.7% on the year when a 14.2% decline was expected, and after a 12.6% drop in August.
Retail sales in the U.K. fell 0.9% month-over-month in September 2023, reversing from a 0.4% increase in August, and worse than market predictions of a 0.2% decline.
The annual inflation rate in Japan declined to 3.0% in September 2023 from 3.2% in the prior month, which was to the lowest reading since September 2022.
INTEREST RATE MARKET FUTURES
Federal Reserve Chair Jerome Powell’s remarks at a Thursday lunchtime address to the Economic Club of New York closely tracked comments of other Federal Reserve officials.
Jerome Powell suggested the increase in long-term Treasury yields could allow the central bank to suspend a historic run of interest rate increases as long as recent progress on inflation continues.
Federal Reserve Bank of Atlanta President Raphael Bostic said today that while inflation remains too high it is coming down, and that could open the door to easier monetary policy late next year.
Other Federal Reserve speakers today are Patrick Harker at 8:00 central time and Loretta Mester at 11:15.
Financial futures markets are now predicting there is almost a 100% probability that the Federal Open Market Committee will keep its fed funds rate unchanged at its November 1 policy meeting.
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