Written Commentary
The Ghost in the Machine Q4 2024
November 15, 2024
INTEREST RATE MARKET FUTURES
The September U.S. 30-year Treasury bond futures advanced to their highest level since March 12 as lower-than-expected consumer price index and producer price index reports this week, and an increase in initial jobless claims increased probabilities that the Federal Open Market Committee can deliver one or more interest rate cuts this year, despite a hawkish stance from the central bank on Wednesday.
Federal Reserve speakers today are Austan Goolsbee at 1:00 and Lisa Cook at 6:00 PM.
Financial futures markets are predicting there is a 73% probability that the Federal Open Market Committee will lower its fed funds rate by 25 basis points at its September 18 meeting.
The long term fundamentals are bullish on balance, especially for the 30-year U.S. Treasury bond futures.
STOCK INDEX FUTURES
S&P 500 and NASDAQ futures are lower today after recently reaching record highs.
Import prices in May declined 0.4% when unchanged was expected, and export prices were down 0.6% against the prediction of unchanged.
The 9:00 central time June consumer sentiment index is estimated to be 73.0, and year ahead inflation expectations are forecast to be 3.2%.
The longer term fundamentals remain supportive to stock index futures.
CURRENCY FUTURES
The U.S. dollar index was higher in the overnight. However, some of these gains were given back in light of the declines in U.S. export and import prices.
The euro zone’s trade surplus increased slightly in April. Exports from the 20-nation bloc were 3.1% higher on the month, while imports increased 2.3%.
The Bank of Japan at its policy meeting today voted unanimously to keep interest rates unchanged as was widely expected. Japan’s 10-year government bond yield fell sharply to around 0.9%, hitting five-week lows after Bank of Japan Governor Ueda said the central bank will begin tapering bond purchases immediately after the July meeting.
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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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