Written Commentary
STOCK INDEX FUTURES
U.S. stock index futures are higher with S&P 500 and Dow futures on track for a second week of gains.
However, fading hopes for fiscal stimulus limited the advance.
The October producer price index was up 0.3% when an increase of 0.2% was expected and the producer price index, excluding food and energy, was up 0.1%, which compares to the anticipated 0.2% gain.
The 9:00 central time November consumer sentiment index is estimated to be 82.
The technical picture remains positive for stock index futures.
CURRENCY FUTURES
Currency market traders became more risk-averse yesterday and today, after the heads of the Federal Reserve and the European Central Bank stressed that the global economic outlook remains uncertain.
The U.S. dollar is lower and remains in a six-day flag congestion pattern.
The greenback has been weakening since May amid rising debt levels coupled with expectations for an extended period of low interest rates.
Longer term, the U.S. dollar is likely to drift lower.
The euro currency is higher after it was reported that the number of employed persons in the euro area increased by 0.9% on the quarter in the three months to September of 2020, recovering from the 2.9% drop in the previous period. This is the largest increase since the series began in 1995.
The euro is higher despite a report that showed the euro zone economy saw a rebound of 12.6% on quarter in the three months to September of 2020, when up 12.7% was expected.
Wholesale prices in Germany fell 1.9% year-on-year in October, following a 1.8% decline in September for the ninth consecutive drop.
A spokesman for British Prime Minister Boris Johnson said familiar differences remain in the E.U. trade talks. The spokesman also noted that negotiations will be paused over the weekend and will resume in Brussels next week.
INTEREST RATE MARKET FUTURES
Financial futures markets are predicting there is a 95.9% probability that the Federal Open Market Committee will keep its fed funds rate unchanged at the December 16 policy meeting.
The yield curve is likely to steepen, which should put pressure on the futures at the long end of the curve, especially the 30-year Treasury bond futures, while futures at the short end of the curve are likely to hold steady.
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.
