Starting Off With Dollar at New Highs

STOCK INDEX FUTURES

Stock index futures are lower as earnings season is set to kick off this week. Investors remain worried about the impact of inflation on corporate profits.

The next key data release is on Wednesday with the U.S. consumer-price index for June.

Stock index futures are likely to recover this afternoon.

CURRENCY FUTURES

The U.S. dollar index advanced to a new 20-year high. The Federal Reserve is likely to hike interest rates more than other major central banks, which suggests higher prices for the U.S. dollar.

The euro currency declined to the lowest level in 20 years, falling towards parity against the U.S. dollar. Pressure on the euro is linked to economic and political concerns, which could make it more difficult for the European Central Bank to tighten monetary policy.

Lower prices are likely for the euro currency.

The British pound remains close to its lowest level since March 2020 as political turmoil in the U.K. clouds the country’s economic outlook.

INTEREST RATE MARKET FUTURES

Portions of the U.S. yield curve remained inverted with yields on shorter-dated Treasury issues  above those of longer-dated debt.

According to financial futures markets, there is a 93.0% probability that the Federal Open Market Committee will hike its fed funds rate by 75 basis points and a 7.0% probability that the rate will increase by 100 basis points at the July 27 meeting.

John Williams of the Federal Reserve will speak at 1:00 central time.

The fundamental and technical aspects of the interest rate market futures are improving.

The main trend for futures is higher.

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