Written Commentary
STOCK INDEX FUTURES
S&P 500 futures advanced to new record highs today.
Durable goods orders in August were unchanged when an increase of 9.8% was expected.
The gross domestic product in the second quarter was up 3.0% at an annualized rate as anticipated, and personal consumption expenditures increased 2.8% when a gain of 2.9% was estimated.
Jobless claims in the week ended September 21 were 218,000 when 224,000 were forecast.
Federal Reserve Chair Jerome Powell will speak at 8:20 AM.
Stock index futures have recently performed better than the news would suggest, which should be viewed as a sign of strength.
CURRENCY FUTURES
The U.S. dollar index is lower but came off its low when the 7:30 U.S. economic reports were released.
The GfK Consumer Climate Indicator for Germany improved to -21.2 heading into October from a marginally revised -21.9 in the previous period. Analysts predicted -21.5.
The Swiss National Bank cut its key interest rate by 25 basis points to 1.0% at its policy meeting today, which was the third consecutive reduction and was in line with market expectations.
Job vacancies in Australia declined for a ninth consecutive quarter in the three months to the end of August. The Australian Bureau of Statistics said vacancies fell 5.2% from the previous three-month period when they fell 3.5%.
INTEREST RATE MARKET FUTURES
Futures came under some pressure when the 7:30 U.S. economic reports were released.
U.S. Treasury will auction seven-year notes today.
In addition to Federal Reserve Chair Powell, other Federal Reserve speakers today are Susan Collins at 8:10, Michelle Bowman at 8:15, John Williams at 8:25, Michael Barr at 9:30, Lisa Cook at 9:30, Neel Kashkari at 12:00 and Lisa Cook at 5:00.
It is widely expected that the Federal Open Market Committee will reduce its key interest rate again at its November meeting. Currently there is a 54% probability that the FOMC will lower its fed funds rate by 50 basis points at its November 7 policy meeting, and there is a 46% chance that the FOMC will reduce its key rate by 25 basis points.
The main trend for futures at the short end of the curve is higher in light of increasing prospects of a more aggressive move to accommodation from the FOMC.
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