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FOMC Likely to Be Dovish on Balance

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STOCK INDEX FUTURES  

The main focus of traders’ attention today is the conclusion of the two-day Federal Open Market Committee meeting. A statement will be released at 1:00 central time and Federal Reserve Chairman Jerome Powell will hold a press conference at 1:30.

U.S. stock futures are higher as investors await clues on the Federal Reserve’s next steps to bolster the economy.

This week is the busiest week of the corporate earnings season. Just over a third of companies in the S&P 500 have reported through Tuesday.

Earnings at major U.S. companies so far have beaten analysts’ downbeat expectations with 78% of firms topping estimates.

The 9:00 central time June pending home sales report is expected to show an increase of 5.2%.

U.S. stock index futures have recently performed well for the news.

CURRENCY FUTURES

Much of the trade appears to be evening up ahead of today’s Federal Open Market Committee meeting statement.

In the overnight trade the U.S. dollar fell to its lowest level since October 2018.

The Australian dollar is higher despite news that Australia’s consumer price index fell 1.9% in the June 2020 quarter compared to an increase of 0.3% in the March 2020 quarter.

INTEREST RATE MARKET FUTURES

At today’s FOMC meeting no change in the federal funds rate is expected. The FOMC will likely maintain its fed funds target range at zero to 25 basis points.

Federal Reserve Chairman Jerome Powell could offer guidance on monetary policy at the post-meeting press conference.

I believe the FOMC statement and comments from Fed Chair Powell will be at least slightly dovish on balance.

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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