Written Commentary
CURRENCY FUTURES
The U.S. dollar index is a little higher but has underperformed the news in recent weeks.
Business confidence in Germany fell slightly in October, remaining at a low level, as companies predict a challenging winter due to the energy crisis.
The Ifo business climate index fell to 84.3 points in October from a revised reading of 84.4 points in September, according to data from the Ifo Institute. This is its lowest level since May 2020. Economists had anticipated the index to come in at 83.6.
The index of the current situation declined to 94.1 in October from 94.5 in September, while the gauge assessing companies’ expectations improved to 75.6 from 75.3.
The Ifo index is based on a poll of approximately 9,000 companies in manufacturing, services, trade and construction.
The Confederation of British Industry’s order book balance decreased to -4 in October of 2022 from -2 in September, and compared to market estimates of -12.
In a recent survey a majority of economists said they expect the Bank of England to hike its policy rate by 75 basis points at the next policy meeting on November 3. There is a minority view that the BoE will increase its key rate by a larger amount.
STOCK INDEX FUTURES
Stock index futures edged lower on Tuesday after a two-day bounce as investors look ahead to another round of corporate earnings reports.
The 9:00 central time October consumer confidence index is expected to be 106.0.
The 9:00 October Richmond Federal Reserve manufacturing index is anticipated to be negative 3.0.
Yesterday futures advanced to the highest level since September 22.
INTEREST RATE MARKET FUTURES
There are no major Federal Reserve speakers scheduled for today. The central bank imposes a quiet period starting the second Saturday before a Federal Open Market Committee meeting during which officials refrain from commenting on the economy and monetary policy. The Fed refers to this as a “Blackout Period.”
The Treasury will auction two-year notes.
According to financial futures markets currently, there is a 95.0% probability that the Federal Open Market Committee will increase its fed funds rate by 75 basis points at the November 2 policy meeting and a 5.0% probability that the rate will be hiked by 50 basis points.
Interested in more futures markets? Explore our Market Dashboards here.
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.
