Written Commentary
STOCK INDEX FUTURES
Stock index futures are lower in response to increasing concerns that growth in the global economy is slowing, along with monetary policy uncertainties.
No major economic reports are scheduled for today.
Despite lower prices today the fundamentals and technical aspects remain positive for stock index futures.
CURRENCY FUTURES
The U.S. dollar index is higher today, advancing to its highest level since December 2020, due to a safe-haven flow of funds.
In the weeks ahead it is likely that there will be follow-through gains for the greenback.
Germany’s producer prices increased by 10.4% from a year earlier in July 2021, accelerating from an 8.5% advance in the previous month and beating market expectations of 9.2%.
Retail sales volumes in the U.K. declined by 2.5% from a month earlier in July 2021, which is the most since January and missing market expectations of a 0.4% increase.
Japan’s consumer prices declined by 0.3% year-on-year in July 2021, after a revised 0.5% drop a month earlier. This was the tenth consecutive month of decrease in consumer prices.
INTEREST RATE MARKET FUTURES
Robert Kaplan of the Federal Reserve will speak at 10:00 central time.
There are follow-through gains today for the 30-year Treasury bond futures due to growing concerns about the state of the global economic recovery. In addition, flight to quality buying is supporting futures due to increasing geopolitical risks.
The interest rate futures markets have been indicating since May clues about the state of the global economy and inflation with the U.S. Treasury yield curve flattening.
There are growing expectations, fueled by some hawkish Fed comments recently that the Fed may use the August 26-28 Jackson Hole Economic Policy Symposium to announce a tapering of its asset-purchase program.
However, some traders are questioning why the 30-year Treasury bond futures are substantially off of their May lows if there is an imminent tapering of the Fed’s asset-purchase program.
Futures are holding up well despite the tapering talk, which suggests additional gains are likely for the 30-year Treasury bond futures.
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