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SIFs Posted Best Day Since March

STOCK INDEX FUTURES

U.S. stock index futures posted their best day yesterday since March as upbeat earnings outweighed inflation fears.

Futures are higher today despite crude oil prices climbing to their highest level in seven years.

Retail sales in September increased 0.7% when a decline of 0.1% was expected.

The October Empire State manufacturing index was 19.8 when 25.0 was anticipated.

The 9:00 central time October consumer sentiment index is predicted to be 74.0 and the 9:00 August business inventories report is estimated to show a 0.7% increase.

The longer-term fundamental and technical aspects remain supportive for stock index futures.

CURRENCY FUTURES

The U.S. dollar index was underpinned by the stronger than expected U.S. retail sales report. However, gains were limited by the weak Empire State manufacturing index.

Interest rate differential expectations remain supportive to the greenback, and higher prices are likely at least up until the November 3 Federal Open Market Committee policy meeting.

Passenger car registrations in the E.U. slumped 23.1% in September of 2021, which is the lowest number for the month of September since 1995.

The Japanese yen fell to its lowest level since 2018, while the Bank of Japan is expected to continue its ultra-accommodative monetary policies.

Pressure on the Japanese yen is linked to concerns that high crude oil and gas prices will pressure  economic growth in Japan, since Japan is a major energy importer.

INTEREST RATE MARKET FUTURES 

Futures are mostly lower on the belief that the Federal Open Market Committee will announce details of a tapering of its asset-purchase program at its November policy meeting.

In addition, some pressure on futures is due to the stronger than expected retail sales report.

Federal Reserve speakers today are James Bullard at 11:20 and John Williams at 12:00.

The next leg up for the 30-year Treasury bond futures will likely be after the next FOMC meeting on November 3 is out of the way.

I believe a tapering  from the FOMC will be a dovish tapering with any reduction being small.

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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