Written Commentary
STOCK INDEX FUTURES
Stock index futures are higher as voting in midterm elections gets underway.
The National Federation of Independent Business Small Business Optimism Index fell to a three-month low of 91.3 in October of 2022, compared to 92.1 in September when 91.8 was expected. This is the tenth consecutive month under the 49-year average of 98.
Stock index futures are performing well for the news.
CURRENCY FUTURES
The U.S. dollar index is higher today but has underperformed in the last two months.
Retail sales in the euro area increased 0.4% month-on-month as anticipated.
The Japanese yen is higher after Japan’s Cabinet approved a second supplementary budget.
Household spending in Japan increased 2.3% in September from a year earlier, coming in slightly lower than economists’ median estimate of 2.7%.
INTEREST RATE MARKET FUTURES
The Treasury will auction three-year notes today.
According to financial futures markets currently, there is a 52.0% probability that the Federal Open Market Committee will increase its fed funds rate by 50 basis points at the December 14 meeting and a 48.0% probability that the rate will be hiked by 75 basis points.
I anticipate Federal Reserve speakers this week may walk back some of Fed Chair Powell’s hawkish comments that he made at his FOMC press conference on Wednesday.
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