Written Commentary
STOCK INDEX FUTURES
Stock index futures were lower in response to the slightly bearish on balance August consumer price index report. However, there has been a recovery to mostly higher.
The August consumer price index increase 0.2% as expected, and on an annualized basis it was up 2.5% when an increase of 2.6% was anticipated.
The consumer price index excluding food and energy on a month-to-month basis was up 0.3% when a gain of 0.2% was forecast and on a year- to-year basis the consumer price index excluding food and energy increased 3.2%, which was as expected.
CURRENCY FUTURES
The U.S. dollar index advanced when the slightly bullish on balance consumer price index report was released.
Germany’s business insolvencies increased 10.7% in August compared to a year ago.
The European Central Bank will hold a policy meeting tomorrow, and a 25 basis point interest rate cut is widely anticipated.
A member of the Bank of Japan’s monetary policy board said the central bank is ready to raise interest rates if inflation is on track.
INTEREST RATE MARKET FUTURES
In the overnight trade the 30-year U.S. Treasury bond futures advanced to their highest level since July of 2023.
Futures came under pressure today when the slightly bearish on balance August consumer price index report was released.
The U.S. Treasury will auction 10-year notes today.
Currently there is an 83% probability that the Federal Open Market Committee will lower its funds rate by 25 basis points at its September 18 meeting, and there is a 17% probability that the FOMC will reduce its key interest rate by 50 basis points in September.
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