Written Commentary
STOCK INDEX FUTURES
Stock index futures are higher in advance of President Donald Trump meeting with top business executives later today.
Recent weakness in prices has been linked to a variety of geopolitical and economic concerns.
The February National Federation of Independent Business Small Business Optimism Index was 100.7 when 101.0 was expected.
The 9:00 central time January Job Openings and Labor Turnover Survey (JOLTS) is anticipated to be 7.5 million.
In the longer term, a more accommodative Federal Open Market Committee will support futures.
CURRENCY FUTURES
The U.S. dollar index declined to the lowest level since November 5 in light of increasing concerns over the escalating trade war.
Retail sales in the U.K. increased 0.9% year-on-year in February 2025, which is a sharp slowdown from January’s 2.5% gain and well under the estimated 2.4% increase.
The Japanese yen is lower now but in the overnight trade the yen advanced to the highest level since October 21, 2024 as demand for safe-haven assets increased in light of growing concerns over tariff risks.
Japan’s gross domestic product grew by 0.6% quarter-to-quarter in the fourth quarter of 2024, which is under the flash estimate of up 0.7% but is higher than an upwardly revised 0.4% expansion in the third quarter.
Australia’s NAB business confidence index declined to -1 in February 2025 from an upwardly revised 5 in the prior month. This marks the first negative reading of the year.
INTEREST RATE MARKET FUTURES
Futures prices are mixed.
There are no Federal Reserve speakers this week since the pre-FOMC ‘blackout’ period just started. The blackout period begins on the second Saturday before a Federal Open Market Committee meeting and ends on the Thursday following the meeting. The next FOMC policy meeting is scheduled for March 19.
The U.S. Treasury will auction three-year notes today.
There has been a major change in the fundamentals and outlook for Federal Reserve policies. The probabilities are increasing that the central bank will more aggressively ease credit conditions this year.
Financial futures markets are predicting the FOMC will keep its fed funds rate unchanged at its March and May meetings but will lower its key interest rate three more times this year with the first reduction at its June policy meeting.
In light of increasing probabilities of the FOMC more aggressively moving to accommodation this year, additional price gains for futures across the yield curve are likely.
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.
