Written Commentary
CURRENCY FUTURES
The U.S. dollar index bounced after falling to a 5-month low yesterday.
The greenback has been under pressure in recent weeks due to expectations that the Federal Reserve will start cutting rates earlier than other major central banks.
Lower prices are likely for the U.S. dollar longer term.
The Nationwide House Price Index in the U.K. declined by 1.8% year-on-year in December 2023, compared with market expectations of a 1.4% decrease. This marked the 11th straight consecutive month of decline in home prices.
STOCK INDEX FUTURES
S&P 500, NASDAQ and Dow Jones stock index futures advanced to new record highs yesterday. However, prices are a little lower today.
The 8:45 central time December Chicago PMI is expected to be 50.0.
The fundamentals and technicals remain supportive to stock index futures.
Stock index futures are likely to close on a firm note today.
INTEREST RATE MARKET FUTURES
Futures are lower.
Financial futures markets are predicting there is a 16% probability that the Federal Open Market Committee will reduce its fed funds rate by 25 points at its January 31, 2024 policy meeting and an 84% probability of no change.
However, financial futures markets are currently suggesting the Federal Open Market Committee will reduce its fed funds rate by 25 basis points at its March 20, 2024 policy meeting.
Higher prices are likely for futures in January.
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