Written Commentary
The Ghost in the Machine Q1 2024
March 19, 2024
CURRENCY FUTURES
The U.S. dollar index remains in an 11-day congestion pattern.
The fundamentals and technicals remain supportive to the U.S dollar.
The economic sentiment indicator in the euro area declined to 96.2 in January 2024, as predicted by economists, but is down from December’s seven-month high of 96.3.
Germany’s gross domestic product shrank 0.3% from October to December compared with the previous quarter. This compares with flat growth in the third quarter.
Money markets are pricing in a first rate cut of 25 basis points from the European Central Bank in April, although the ECB President Christine Lagarde commented at last week’s monetary policy meeting that it would be premature for policymakers to discuss interest rate reductions.
The Bank of England is expected to leave interest rates unchanged at 5.25% at its policy meeting on Thursday.
STOCK INDEX FUTURES
Stock index futures are lower today after S&P 500 and Dow futures advanced to record highs yesterday.
Today is the first day of the two-day Federal Open Market Committee meeting.
The 9:00 central time January consumer confidence index is expected to be 112.5.
The 9:00 December job openings and labor turnover survey (JOLTS) is anticipated to be 8.7 million.
The fundamentals and technicals remain supportive to stock index futures.
INTEREST RATE MARKET FUTURES
Futures are mostly higher, especially at the long end of the curve.
There are no Federal Reserve speakers scheduled for today, which is in keeping with the Federal Reserve’s “blackout period” in advance of a Federal Open Market Committee meeting.
Financial futures markets are predicting there is a 2.0% probability that the Federal Open Market Committee will lower its fed funds rate by 25 basis points at the January 31 policy meeting, and there is a 98% probability that the Fed will keep rates unchanged.
Interested in more futures markets? Explore our Market Dashboards here.
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.
© 2024 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.
