30Yr Bonds Break Out to the Upside

STOCK INDEX FUTURES

Futures are mixed.

The 8:45 central time July PMI manufacturing index is expected to be 51.8.

Futures are being supported by the belief that the Federal Open Market Committee is becoming less hawkish.

In addition, the technical aspects are becoming more friendly.

CURRENCY FUTURES

The S&P Global Germany Composite PMI fell to 48 in July of 2022 from 51.3 in the previous month and well under market expectations of 50.1. The latest reading pointed to the first contraction of activity since December of last year and the worst in 25 months.

The common currency declined below the key $1.00 level last week for the first time in 20 years, on concerns the energy crisis could push Europe into a recession and make it more difficult for the ECB to tighten monetary policies.

Lower prices are likely for the euro currency.

Retail sales in the U.K. edged down 0.1% month-to- month in June of 2022, following an upwardly revised 0.8% decline in May and compared to market forecasts of a 0.3% drop.

Japan’s overall consumer inflation rose 2.4% from a year earlier in June, exceeding the Bank of Japan’s 2.0% target for three straight months.

INTEREST RATE MARKET FUTURES

Futures are higher cross the board on the growing belief that the Federal Open Market Committee is becoming less hawkish.

According to financial futures markets, there is a 77.5% probability that the Federal Open Market Committee will hike its fed funds rate by 75 basis points and a 22.5% probability that the rate will increase by 100 basis points at the July 27 meeting.

Yesterday the 30-year Treasury bond futures broke out above a two-week symmetrical triangle pattern with follow- through today.

Higher prices are likely for the interest rate market futures.

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