Written Commentary
STOCK INDEX FUTURES
Stock index futures are lower due to geopolitical tensions.
The 9:00 central time June job openings and labor turnover survey (JOLTS) is expected to be 11.0 million.
Futures are likely to at least partially recover this afternoon.
CURRENCY FUTURES
Flight to quality buying is supporting the U.S. dollar.
The British pound declined on news that U.K. corporate insolvencies jumped 81% to the highest level since 2009.
In spite of this news, there is underlying support for the pound on the belief that the Bank of England will hike its key interest rate by 50 basis points at its policy meeting on Thursday. This would be the biggest increase in 27 years, pushing borrowing costs to 1.75%, the highest level since 2009.
The Reserve Bank of Australia raised the cash rate by 50 basis points to 1.85% at its policy meeting today. The move followed a 50 basis point increase in July and June, and a 25 basis point hike in May, bringing the cash rate to the highest level since 2016.
INTEREST RATE MARKET FUTURES
Flight to quality buying has supported futures across the board with the 30-year Treasury bond futures advancing to four-month highs.
Charles Evans of the Federal Reserve speaks at 9:00.
According to financial futures markets, there is a 79.5% probability that the Federal Open Market Committee will hike its fed funds rate by 50 basis points and a 20.5% probability that the rate will increase by 75 basis points at the September 21 policy meeting.
Higher prices are likely across the board for the interest rate market futures as the U.S. economy continues to weaken.
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.
