Written Commentary
STOCK INDEX FUTURES
Stock index futures are mixed.
Jobless claims in the week ended January 11 were 217,000 when 212,000 were expected.
Retail sales in December increased 0.4% when up 0.5% was anticipated.
The January Philadelphia Federal Reserve manufacturing index was 44.3 when -7 was estimated.
Import prices in December increased 0.1% as forecast, and export prices increased 0.3% when a gain of 0.2% was expected.
The 9:00 central time January housing market index is anticipated to be 46.0, and the 9:00 November business inventories report is estimated to show a 0.1% increase.
Today’s economic reports offer a mixed view on the economic outlook. However, the recent softer than forecast producer and consumer price index reports give latitude to the Federal Open Market Committee to be more accommodative.
CURRENCY FUTURES
The U.S. dollar index is higher.
The long term fundamentals and technicals remain supportive to the U.S. dollar, and higher prices are likely.
The European Central Bank indicated interest rate cuts will be appropriate if baseline projections hold, according to the minutes from its December 2024 policy meeting.
The gross domestic product in the U.K. increased 0.1% in November, missing the 0.2% forecast, and increasing concerns about economic stagnation.
The long term fundamentals and technicals remain bearish for the euro currency and the British pound, and lower prices are likely.
The Japanese yen strengthened following recent hawkish comments from Bank of Japan Governor Kazuo Ueda. On Wednesday, Ueda stated that the Bank of Japan would discuss the possibility of raising interest rates at its upcoming policy meeting,
INTEREST RATE MARKET FUTURES
Futures are lower across the board.
There is a 97% probability that the Federal Open Market Committee will keep its fed funds rate unchanged at 4.25% – 4.50% at its January 29, 2025 policy meeting, and there is a 3% chance of a 25 basis point reduction.
The timeline for a 25 basis point interest rate cut from the FOMC has been pushed out to the June 18, 2025 policy meeting.
The U.S. economy is likely to perform well, which may cause the FOMC to be slower to add accommodation in 2025 than the consensus view.
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.
