US Dollar Index Steady
The U.S. dollar index is steady today. However, interest rate differential expectations are long-term bearish for the greenback, and lower prices are likely.
The U.K. labour market cooled noticeably last month, with demand for staff and pay growth easing, and staff shortages became less acute. The monthly index of demand for staff from the Recruitment and Employment Confederation declined in November to 54.1 from 56.7 in October, which is the lowest reading since February 2021.
Japan’s economy contracted at a slightly slower pace than initially estimated in the third quarter. The world’s third-largest economy shrank 0.8% on an annualized basis, compared with 1.2% contraction in the preliminary estimate that was released in mid-November. The median forecast called for a 1.1% annualized decline.
Yesterday the Bank of Canada raised its main interest rate by 50 basis points to 4.25% from 3.75%, which is the highest level in nearly 15 years.
STOCK INDEX FUTURES
Stock index futures are higher today, after recent weakness that was linked to warnings from major Wall Street bankers of a looming recession.
Jobless claims in the week ended December 3 were 230,000 when 228,000 were expected.
The fundamentals and technicals for stock index futures remain supportive.
INTEREST RATE MARKET FUTURES
The 30-year Treasury bond futures advanced to a 13-week high yesterday high but are lower today.
There are no Federal Reserve speakers today with the Fed’s self-imposed blackout period in force ahead of next week’s Federal Open Market Committee meeting.
Recently the spread between 2-year Treasury and 10-year Treasury yields inverted by over 80 basis points, the most in 41 years, which has recessionary implications.
According to financial futures markets currently, there is a 75.0% probability that the Federal Open Market Committee will increase its fed funds rate by 50 basis points at the December 14 policy meeting and a 25.0% probability that the rate will be hiked by 75 basis points.
The fundamental and technical aspects have turned more supportive for futures.
Interested in more futures markets? Explore our Market Dashboards here.
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.