Written Commentary
INTEREST RATE MARKET FUTURES
Futures are higher despite recent hawkish comments from Federal Reserve officials.
Yesterday the World Bank sharply reduced its economic growth forecasts for most countries, and warned that new adverse shocks could tip the global economy into a recession. Global gross domestic product will probably increase 1.7% this year, which is about half the pace forecast in June. The bank also cut its growth estimates for 2024.
The U.S. Treasury will auction 10-year notes today.
According to financial futures markets currently, there is a 79.0% probability that the Federal Open Market Committee will increase its fed funds rate by 25 basis points at the February 1 policy meeting and a 21.0% probability that the rate will be hiked by 50 basis points.
Longer term, higher prices are likely for futures across the yield curve.
STOCK INDEX FUTURES
Stock index futures are higher despite recent hawkish comments from Federal Reserve officials.
Mortgage applications increased 1.2% in the first week of January 2023, following a 10.3% plunge in the last week of 2022.
The January Atlanta Federal Reserve business inflation expectations report will be released at 9:00 central time. Inflation expectations in December were 3.1%.
Futures are recently performing well for the news.
CURRENCY FUTURES
The U.S. dollar index is higher due to recent hawkish comments from Federal Reserve officials.
Interest rate differential expectations are neutral.
Japanese households’ inflation expectations edged up in the three months to December, according to a central bank survey.
Data from the Australian Bureau of Statistics showed retail sales in Australia jumped 1.4% in November from October to a record. That was more than twice the median forecast of 0.6%, and October’s result was revised up sharply to an increase of 0.4% from an originally reported drop of 0.2%.
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.
