Stimulus Optimism Supports Stock Index Futures
STOCK INDEX FUTURES
U.S. stock index futures are higher due to fresh optimism about progress on stimulus talks in Washington and a more optimistic outlook for a global economy recovery.
The 9:00 central time October housing market index is expected to be 83.
The technical situation remains positive for stock index futures.
The U.S. dollar is lower as safe-haven longs are liquidated.
The euro currency is higher on news that euro zone construction output fell the least in six months. Euro zone construction output contracted 0.9% from a year earlier in August 2020.
The British pound advanced after news that British officials are prepared to rewrite Boris Johnson’s Brexit bill to get a deal with the E.U.
Japan’s exports fell at a much slower pace in September. Exports fell 4.9% in September from a year earlier, compared with August’s 14.8% decline.
INTEREST RATE MARKET FUTURES
Futures at the longer end of the curve are under pressure as flight to quality longs are liquidated in light of higher stock index futures.
Richard Clarida of the Federal Reserve will speak at 10:45.
Interest rate market futures at the short end of the curve are likely to be supported by ideas that major central banks, including the Federal Reserve, will keep short term interest rates low for an extended period. Many analysts believe it will be several years before the Federal Reserve will be in a position to hike its fed funds rate.
However, futures at the long end of the curve, especially the 30-year Treasury bond futures may be undermined by the inflationary aspects of the Federal Reserve’s “average inflation targeting” policy.
There is a double bottom on the December 30-year Treasury bond futures daily chart at the 173^10 – 173^11 level, which will likely be taken out.
Financial futures markets are predicting there is almost a 100% probability that the Federal Open Market Committee will keep its fed funds rate unchanged at the November 4-5 policy meeting.
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.