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.
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.
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.