Written Commentary
STOCK INDEX FUTURES
The 8:45 central time January Chicago PMI is expected to be 62.1 and the 9:30 January Dallas Federal Reserve manufacturing index is anticipated to be 10.0.
Stock index futures in the short term will have a difficult time, considering the ongoing geopolitical risks and the hawkish Federal Reserve.
CURRENCY FUTURES
The U.S. dollar index is lower and is looking toppy.
The euro zone economy grew at a slower pace in the fourth quarter than in the previous period Gross domestic product grew 0.3% on the quarter in the last three months of the year, which is in line with the forecast of economists. However, year-on-year, the economy grew 4.6%, which compares to the 4.7% growth that was estimated by economists.
The European Central Bank will hold its policy meeting on Thursday. No change in policy is predicted.
The Bank of England will hold its policy meeting on Thursday. Economists expect the Monetary Policy Committee to announce a 25 basis point hike, taking the bank rate to 50 basis points. Financial futures markets have priced in up to four Bank of England interest rate increases this year, which in the longer term, will likely support the British pound.
The Japanese yen is lower.
An accommodative Bank of Japan will likely result in long-term pressure on the yen.
INTEREST RATE MARKET FUTURES
Federal Reserve speakers today are Mary Daly at 10:30 and Esther George at 11:40.
Many market participants now expect four or five fed funds rate hikes in 2022.
Some analysts believe that if the rate of growth in the U.S. economy slows, and also the global economy, it may be difficult for the Federal Reserve to maintain its ramped-up hawkish policy stance.
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.
