US Dollar at Six Week Highs
STOCK INDEX FUTURES
U.S. stock index futures declined in the overnight trade due to increasing prospects of reduced global GDP growth.
In addition, Federal Reserve Chairman Jerome Powell released his prepared remarks for his testimony on the Coronavirus and Cares Act before the Senate Banking Committee. Mr. Powell said Inflation is elevated and will likely remain so in coming months before moderating.
Mr. Powell is scheduled to testify before the Senate Banking Committee at 9:00 central time.
August wholesale inventories increased 1.2% when up 0.4% was expected.
The 9:00 September consumer confidence index report is anticipated to be 114.8 and the 9:00 September Richmond Federal Reserve manufacturing index is predicted to be 9.
Despite lower prices today, the longer-term fundamental and technical aspects remain supportive for stock index futures.
The U.S. dollar index advanced to a six-week high, as higher U.S. Treasury yields made the dollar more attractive to investors.
U.S. Treasury yields have increased since the end of last week, after the Federal Reserve said it will likely begin reducing its monthly bond purchases as early as November.
In addition, there is some flight to quality buying coming into the greenback.
The euro is lower despite news that The GfK Consumer Climate Indicator in Germany increased to 0.3 heading into October from -1.1 in September and beating estimates of -1.6. This is the highest reading since April of 2020.
INTEREST RATE MARKET FUTURES
Futures at the long end of the curve declined, as U.S. government bond yields hit their highest level in three months.
Traders continue to weigh prospects that the Fed will soon taper its $120 billion a month in asset purchases.
Federal Reserve Governor Lael Brainard said the labor market may soon meet her target for tapering to start, while New York Fed Bank President John Williams said moderating bond-buying may soon be warranted.
In addition to Fed Chair Powell, other Fed speakers today are Charles Evans at 8:00, James Bullard at 12:40, Raphael Bostic at 2:00 and James Bullard at 6:00.
The Treasury will auction seven-year notes.
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.