Written Commentary
ADM Appoints Monish Patolawala as EVP and CFO
July 10, 2024
INTEREST RATE MARKET FUTURES
Underlying support for futures remains due to the belief that central banks will not be able to keep raising interest rates much longer.
Markets are currently pricing in a 25 basis point rate increase at the Fed’s May 3 policy meeting. However, easier credit conditions from the Federal Reserve are likely later this year.
The technicals and fundamentals remain supportive.
STOCK INDEX FUTURES
Stock index futures are lower.
March personal income increased 0.3% when up 0.2% was expected and personal consumption expenditures were unchanged as anticipated.
The first quarter employment cost index increased 1.2% when up 1.0% was predicted.
The 8:45 central time April Chicago PMI is estimated to be 43.5.
The 9:00 April consumer sentiment index is expected to be 63.5.
Futures will probably trade sideways in advance of the May 3 Federal Open Market Committee meeting.
CURRENCY FUTURES
The euro currency is lower on news that the euro zone economy expanded by 0.1% in the first quarter, falling short of the predicted 0.2% expansion.
Germany’s consumer price inflation eased to 7.2% year-on-year in April 2023, which is down from 7.4% the month before and slightly under market expectations of 7.3%.
The unemployment rate in Germany was 5.6% in April 2023, unchanged from the previous month’s 20-month high and in line with market expectations.
Markets are fully pricing in a 25 basis point interest rate hike from the European Central Bank at its policy meeting on May 4.
A Bank of England interest rate increase is likely when the central bank meets on May 11.
Switzerland’s leading KOF economic barometer declined to 96.4 in April of 2023 from an upwardly revised 99.2 in the previous month, missing market predictions of 98.1.
At today’s Bank of Japan policy meeting the central bank maintained its key short-term interest rate at -0.1% and that of 10-year bond yields at approximately 0% by a unanimous vote.
The jobless rate in Japan was 2.8% in March, which compares to the expected 2.5%.
Longer term, interest rate differentials suggest lower prices for the U.S. dollar and higher prices for the euro currency.
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.
