Written Commentary
STOCK INDEX FUTURES
Stock index futures were higher in the overnight trade but quickly declined when the U.S. 7:30 central time economic reports were released.
The consumer price index for December increased 0.3% when up 0.2% was expected. On an annualized basis the consumer price index was up 3.4% when a gain of 3.2% was predicted.
Jobless claims in the week ended January 6 were 202,000 when 209,000 were anticipated.
The fundamentals and technicals remain supportive to stock index futures longer term despite recent talk of a potentially less dovish Federal Reserve this year.
INTEREST RATE MARKET FUTURES
The Treasury will auction 30-year bonds today.
Thomas Barkin of the Federal Reserve will speak at 11:40 central time.
There were comments this week made by the Federal Reserve Bank of New York President John Williams and the Federal Reserve Bank of Atlanta President Raphael Bostic suggesting the Fed needs more evidence inflation is moving toward 2.0% before lowering interest rates.
Financial futures markets are predicting there is a 3.0% probability that the Federal Open Market Committee will reduce its fed funds rate by 25 points at its January 31, 2024 policy meeting and a 97% probability of no change.
CURRENCY FUTURES
The U.S. dollar index advanced due to the bullish U.S. economic reports.
However, it is likely that the gains that were inspired by this morning’s economic reports will be mostly given back later today.
Lower prices are likely for the U.S. dollar longer term.
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