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Flight to Quality Supports Rates

INTEREST RATE MARKET FUTURES

Futures are higher across the yield curve due to flight to quality buying, with two-year yields falling 13 basis points.

Global Ticker Board

Federal Reserve speakers today are Raphael Bostic at 8:05, Thomas Barkin at 10:45, Esther George at 1:15 and Raphael Bostic at 5:45.

According to financial futures markets, there is a 46.0% probability that the Federal Open Market Committee will hike its fed funds rate by 50 basis points and a 54.0% probability that the rate will increase by 75 basis points at the November 2 policy meeting. Last week the probability of a 75 basis point hike in the fed funds rate was as high as 68%.

STOCK INDEX FUTURES

Stock index futures are higher due to falling U.S. Treasury yields.

Prices are higher despite ongoing worries of a global economic downturn from aggressive interest rate hikes from central banks.

The 8:45 central time September manufacturing PMI is expected to be 51.4.

The 9:00 September Institute for Supply Management manufacturing index is anticipated to be 52.4 and the 9:00 August construction spending report is predicted to show a 0.1% decline.

CURRENCY FUTURES

The U.S. dollar index advanced in a flight to quality move on news that euro-denominated bonds issued by a large Swiss bank dropped to record lows.

In addition, interest rate differential expectations remain bullish for the greenback long term.

The euro currency is lower on news that the euro zone September manufacturing PMI came in a little weaker than estimated  at 48.4 when 48.5 was forecast.

U.K. manufacturing output fell for a third month in a row in September and orders declined for a fourth consecutive month.

The annual inflation rate in Switzerland unexpectedly fell to 3.3% in September 2022, compared with market forecasts and August’s 29-year peak of 3.5%.

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.

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