Written Commentary
STOCK INDEX FUTURES
U.S. stock index futures declined, tracking lower overseas equities as traders watched for the potential ripple effects of the default of a major overseas real estate company, concerns about the pace of the global economic recovery, ongoing debates over the debt limit in Washington and the Federal Reserve deciding on potentially tapering its stimulus.
The 9:00 central time September housing market index is expected to be 75.
A new move higher is likely for stock index futures after the Federal Open Market Committee meeting on Wednesday is out of the way.
CURRENCY FUTURES
In a flight to quality move the dollar index strengthened for a third consecutive session to the highest level since August 24.
In addition, the Swiss franc and the Japanese yen are higher, which are also considered to be flight to quality vehicles.
The euro currency is lower despite news that Germany’s producer prices surged 12.0% from a year earlier in August 2021, accelerating from a 10.4% increase in the previous month and beating market expectations of up 11.4 %. This was the largest increase in producer costs since December 1974.
The Bank of England will hold its monetary policy meeting on September 23.
INTEREST RATE MARKET FUTURES
Flight to safety is supporting futures, especially the thirty-year Treasury bond futures.
Traders are looking ahead to the September 22 Federal Open Market Committee meeting for guidance as to when the Federal Reserve will taper its $120 billion a month in asset purchases.
The consensus is for an actual announcement to be delayed until the November or December meetings.
The dominant bullish fundamental influence is the reduced pace of the global economic recovery.
Higher prices are likely for the thirty-year Treasury bond futures.
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