Written Commentary
STOCK INDEX FUTURES
Stock index futures are lower as Federal Reserve officials ramped up their hawkishness.
The president of the Cleveland Federal Reserve on Monday said the central bank may well need to raise interest rates once more this year and then keep rates high “for some time” to get inflation fully under control. Loretta Mester said “inflation remains too high” despite a sharp slowdown in price increases since last year.
The 9:00 central time August Job Openings and Labor Turnover Survey (JOLTS) is expected to be 8.75 million.
CURRENCY FUTURES
The U.S. dollar gained after Federal Reserve officials’ hawkish comments.
Prices at U.K. chain stores increased at the slowest pace in a year in September, according to industry data.
The British Retail Consortium said annual shop price inflation slowed to 6.2% in September from 6.9% in August, which is its lowest since September 2022.
The annual inflation rate in Switzerland increased to a three-month high of 1.7% in September of 2023 from 1.6% in the previous month but below market estimates of 1.8%.
The Reserve Bank of Australia kept its cash rate unchanged at 4.1% as expected at its policy meeting today, extending the rate pause for the fourth consecutive meeting.
INTEREST RATE MARKET FUTURES
Futures are steady to a little higher at the front of the yield curve and lower at the long end of the curve.
Financial futures markets are predicting there is a 74% probability that the Federal Open Market Committee will keep its fed funds rate unchanged and a 26% probability of a 25 basis point increase at its November 1 policy meeting.
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