STOCK INDEX FUTURES
Stock index futures are higher despite President Donald Trump’s renewed threat of a 25% tariff on Canada and Mexico as soon as tomorrow, while a 10% tariff on China remains under consideration.
The downside gap on the March S&P 500 daily chart at 6105.25 – 6122.00 that took place on January 27 has now been filled, and futures are trading above the top of that gap area.
Personal income in December increased 0.4% as expected, and personal consumption expenditures in December were up 0.7% when a gain of 0.5% was anticipated.
The employment cost index in the fourth quarter of 2024 increased 0.9% as forecast.
The 8:45 central time January Chicago PMI is estimated to be 40.0.
In the longer term outlook, the bullish influence of prospects of a strengthening U.S. economy will more than offset the bearish influence of the Federal Reserve’s reluctance to ease credit conditions.
CURRENCY FUTURES
The U.S. dollar index is higher in a flight to safety move, and is being supported by the renewed threat of tariffs.
On the daily March U.S. dollar index chart, prices on Friday declined below a double bottom level at 107.545. There was only limited follow-through to the downside on Monday. However, prices advanced this week and are above the double bottom breakout level, which suggests Friday’s chart sell signal was a false sell signal.
In addition, gains in the greenback today have taken prices above a major downtrend line that started almost three weeks ago.
Germany’s annual consumer price inflation declined to 2.3% in January 2025, which is down from 2.6% in December and is under market expectations of 2.6%, according to a preliminary estimate.
The unemployment rate in Germany, which is Europe’s largest economy, increased to 6.2% in January, which is a slight increase from the 6.1% recorded in December.
The Nationwide House Price Index in the U.K. increased 4.1% year-on-year in January 2025, and is below the expected 4.3% advance. On a monthly basis, house prices grew 0.1%, which is down from 0.7% in the previous period and missing predictions of 0.3% growth.
INTEREST RATE MARKET FUTURES
Futures are narrowly mixed.
The yield on the U.S. 10-year Treasury note advanced above 4.54% on Friday.
Financial futures market are predicting the FOMC will reduce its fed fund rate by 25 basis points at its June policy 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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