US Dollar Index Declines
The U.S. dollar index declined yesterday after Powell’s speech and there is follow-through weakness today.
Interest rate differentials are neutral for the U.S. dollar index and breakouts for the greenback are likely to fail in both directions.
Bank lending in Japan in January increased 3.5% on an annualized basis.
STOCK INDEX FUTURES
Stock index futures rallied yesterday after Powell’s speech was out of the way. However, prices are lower today.
Yesterday’s December consumer credit report showed a reluctance on the part of consumers to spend. The report showed an increase of only $11.6 billion when up $25.0 billion was expected.
The 9:00 central time December wholesale inventories report is anticipated to show a 0.1% increase.
The technical aspects for stock index futures remain supportive.
INTEREST RATE MARKET FUTURES
Yesterday Fed Chair Jerome Powell reiterated that the disinflationary process has begun, and the Fed has the tools to bring down inflation to its 2.0% target.
The Treasury will auction 10-year notes today.
Federal Reserve speakers today are Raphael Bostic at 9:00, Neel Kashkari at 11:30 and Christopher Waller at 12:45.
Most likely the Federal Open Market Committee will increase its fed funds rate by 25 basis points at its March meeting.
The long term outlook for futures is higher.
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.
© 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.