Written Commentary
STOCK INDEX FUTURES
U.S. stock index futures are higher after the November Empire State manufacturing index was reported to be 30.9 when 22.7 was expected.
There are fears that inflation will stay high for longer-than-expected, which could force central banks to tighten credit policies sooner. In addition, there are supply-chain problems and tight labor market conditions
Countering these bearish influences are the better than expected third quarter corporate earnings reports.
CURRENCY FUTURES
The U.S. dollar index is a little lower but remains near its highest level since July 2020.
The euro zone trade surplus narrowed to EUR 7.3 billion in September of 2021 from EUR 24.1 billion in the same month of the previous year, which is above market expectations of EUR 6.5 billion.
Commenting on the European Central Bank’s policy outlook, ECB President Christine Lagarde said any tightening measure now would cause more harm than good to the economy.
The British pound edged higher on Monday due to the likelihood of the Bank of England raising interest rates next month.
The Japanese economy, which is the world’s third-largest, shrank 0.8% quarter to quarter in the third quarter of 2021, compared with market expectations of a 0.2% decline and after a downwardly revised 0.4% growth in the second quarter.
INTEREST RATE MARKET FUTURES
The 30-year Treasury bond futures are holding up relatively well despite growing calls for the Federal Reserve to hike its fed funds rate.
There is pressure on other central banks to tighten credit conditions. In Europe, euro zone money markets priced in two full European Central Bank rate increases by the end of next year. Also, the Bank of England is expected to be the first major central bank to hike rates, probably next month.
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.
