Written Commentary
STOCK INDEX FUTURES
Stock index futures are higher.
The August producer price index increased 0.7% when up 0.4% as expected, and the August producer price index, excluding food and energy, advanced 0.2% when up 0.2% was anticipated.
Retail sales in August increased 0.6% when a gain of 0.2% was predicted.
Jobless claims in the week ended September 9 were 220,000 when 225,000 were estimated.
The 9:00 central time July business inventories report is forecast to show a 0.1% increase.
Stock index futures are performing well for the news, which suggests follow-through gains are likely today.
CURRENCY FUTURES
The U.S. dollar advanced when the stronger than expected U.S. economic reports were released.
Longer term, interest rate differential expectations remain favorable for the greenback, especially against the European currencies, since the U.S. economy appears to be holding up relatively well compared to economies in Europe.
The European Central Bank raised interest rates by another 25 basis points at its policy meeting today, marking the 10th consecutive rate hike. This move took the main refinancing operations rate to a 22-year high of 4.50% and the deposit facility rate to a new record of 4.0%.
Australian employment increased more than expected in August. The total number of employed people in the country grew 64,900 in August, which compares to expectations for an increase of 24,300 people. There was a decline of 14,600 in the prior month.
Australia’s unemployment rate remained steady at 3.7% in August, matching the market forecast.
July core machinery orders in Japan declined 1.1% on the month when down 0.2% was predicted.
INTEREST RATE MARKET FUTURES
Futures are higher despite bearish on balance U.S. economic reports, which suggests follow-through gains are likely today.
There are no Federal Reserve speakers ahead of the upcoming Federal Open Market Committee meeting, which is in keeping with the Federal Reserve’s self-imposed blackout period.
The Federal Open Market Committee is expected to keep its fed funds rate steady this month, while the probability of a quarter-point hike later in the year has been increasing.
Financial futures markets are predicting there is a 97% probability that the Federal Open Market Committee will keep its fed funds rate unchanged at its September 20 policy meeting, and there is a 3% probability of a 25 basis point increase.
However, there is a 42% probability that the FOMC will hike its fed funds rate by 25 basis points at its November 1 policy meeting.
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.
