NY Fed Manufacturing Index Turns Negative
STOCK INDEX FUTURES
Stock index futures were lower in the overnight trade but were able to recover to mixed.
The May New York Federal Reserve manufacturing index was negative 11.6 when positive 15.0 was expected.
On Thursday of last week a major downside chart objective was hit in the S&P 500 futures using the midway congestion pattern, measured move technique.
The U.S. dollar index is a little lower but remains near a 20-year high.
Interest rate differential expectations suggest higher prices are likely for the greenback.
The European Commission revised the EU’s growth outlook downwards, and the forecast for inflation upward.
Wholesale prices in Germany increased 23.8% year-on-year in April, which breaks a record rate for a third consecutive month.
The euro area recorded a €16.4 billion trade gap in March, compared to a €22.5 billion surplus a year earlier.
Now is a good time to cover all shorts in the Japanese yen now that interest rate differential expectations are becoming less bearish on the yen.
Housing starts in Canada jumped 8.0% over a month to 267,330 units in April, which is above market expectations of 246,400 units, according to the Canada Mortgage and Housing Corporation.
INTEREST RATE MARKET FUTURES
Futures firmed when the bullish, much weaker than anticipated New York Federal Reserve manufacturing index was released.
Financial futures markets are predicting there is an 87.2% probability that the Federal Open Market Committee will hike its fed funds rate by 50 basis points and a 12.8% probability that the rate will increase by 75 basis points at the June 15 policy meeting.
Now is a good time to cover short positions in the interest rate market futures, since there are indications that the rate of inflation is peaking.
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2021 ADM Investor Services International Limited.
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.