Written Commentary
CURRENCIES
The U.S. dollar index is lower after the larger than anticipated jobless claims report was released but remains in a five-day trading range.
Overall gains in the greenback since October were linked to ideas that the U.S. economy will hold up well compared to a deteriorating economic outlook in other parts of the world.
Retail sales in the euro area declined 0.5% month-over-month in October 2024, reversing a 0.5% increase in September and worse than predictions of a 0.3% fall.
German industrial orders fell 1.5% in October, which compares to the expected decline of 2.0%.
The German Economic Institute (IW) predicted the German economy will grow by only 0.1% next year.
The fundamentals and technicals remain supportive to the U.S. dollar, and higher prices are likely. The fundamentals and technicals remain bearish for the euro currency and the British pound, and lower prices are likely.
STOCK INDEX FUTURES
Stock index futures are mixed to lower today after yesterday S&P 500, NASDAQ and Dow futures advanced to new records highs.
U.S. employers announced 57,727 job cuts in November 2024, which is slightly higher than the 55,597 in October and 45,510 a year ago.
Jobless claims in the week ended November 30 were 224,000 when 215,000 were expected.
The long term fundamentals and technicals remain supportive to stock index futures.
INTEREST RATES
Futures are lower across the board.
On Wednesday, Federal Reserve Chair Jerome Powell indicated the central bank is not in a hurry to lower interest rates. He cited stronger-than-expected economic growth, a stable labor market and persistent inflationary pressures.
Yesterday’s release of the Federal Reserve’s Beige Book on the economy showed U.S. economic activity expanded slightly in most regions since early October and rising business optimism for 2025.
Thomas Barkin of the Federal Reserve will speak at 11:15 central time.
There is a 74% probability that the Federal Open Market Committee will lower its fed funds rate by 25 basis points at its December 18 policy meeting, and there is a 26% chance of the FOMC keeping rates unchanged at 4.50% – 4.75%.
It is likely that the FOMC will 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.
