Written Commentary
STOCK INDEX FUTURES
U.S. stock index futures declined yesterday, driven by uncertainty regarding the potential impact of the Omicron Covid-19 variant. Markets are also still reacting to comments from Federal Reserve Chairman Jerome Powell made earlier this week that suggested the central bank was prepared to accelerate tapering its asset-purchase program.
Jobless claims in the week ended November 27 were 222,000 when 245,000 were expected.
The short-term outlook is subject to variant news. However, the long-term fundamentals remain bullish on balance for stock index futures.
CURRENCY FUTURES
It looks like the bull market for the U.S. dollar is over for now. The greenback has not performed well on bullish news in recent days.
The euro area seasonally-adjusted unemployment rate edged down to 7.3% percent in October 2021, which is the lowest level since April 2020 and was in line with market expectations. The number of unemployed fell by 64,000 to 12.045 million.
INTEREST RATE MARKET FUTURES
Federal Reserve Chair Jerome Powell reiterated on Wednesday that U.S. policymakers will discuss an earlier end to the central bank’s stimulus at the next meeting and acknowledged that inflation may not recede in the second half of 2022.
Federal Reserve speakers today are Randal Quarles at 10:00, Mary Daly at 10:30, Thomas Barkin at 10:30 and Raphael Bostic at 10:30.
The yield curve has flattened this week, with yields on shorter-dated issues rising and yields on longer-dated issues ticking down, which is an indication of a slowing economy.
The double top on the daily chart of the March 30-year Treasury bond futures was taken out yesterday with follow-through gains today. The longer-term trend for the 30-year Treasury bond futures is higher.
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