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Weak NFIB Supports Treasury Bonds

STOCK INDEX FUTURES

U.S. stock index futures are mixed.

The October National Federation of Independent Business small business optimism index fell for the second consecutive month to 98.2, which is the lowest in seven months, from 99.1 in September. Economists were anticipating the index would come in at 98.5.

Expectations for business conditions over the next six months deteriorated, with the sub-index falling four points. Also, the number of firms reporting positive profit trends decreased three points.

The October producer price index increased 0.6% as expected, and the October producer price index, excluding food and energy, increased 0.4% when up 0.5% was anticipated.

CURRENCY FUTURES

The ZEW Indicator of Economic Sentiment for Germany jumped to 31.7 in November from 22.3 in October, beating market forecasts of 20. Economists are more optimistic about the coming six months and expect growth to pick up and inflation to fall in the first quarter of 2022.

Germany’s benchmark Bund yield fell to -0.28% in the second week of November, which is the lowest since September 22 extending its biggest weekly decline since 2012.

The yield on U.K. 10-year gilts fell to 0.84% in the second week of November, which is the lowest since September 22, after the Bank of England defied expectations of a rate hike last week.

INTEREST RATE MARKET FUTURES

The weak October National Federation of Independent Business small business optimism index supported futures, especially at the long end of the curve.

The yield on the benchmark U.S. 10-year Treasury note edged down to 1.46% on Tuesday, which is close to levels not seen since late September.

Federal Reserve speakers today are Federal Reserve Chairman Jerome  Powell at 8:00, Mary Daly at 10:35 and Neel Kashkari at 12:30 central time.

The Treasury will auction 10-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.

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