Written Commentary
STOCK INDEX FUTURES
NASDAQ futures advanced to record highs.
Over one-fifth of the companies in the S&P 500 index and a third of Dow Jones Industrial Average companies are scheduled to release earnings this week.
The December Chicago Federal Reserve national activity index was 0.52. This compares to last month’s revised 0.31.
The January Dallas Federal Reserve manufacturing survey will be released at 9:30 central time. In December it was 9.7.
CURRENCY FUTURES
The euro currency is a little lower after a report showed German business sentiment deteriorated in January. The Ifo Institute said its business-climate index came in at 90.1 in January compared with an upwardly revised 92.2 in December. Economists had forecast a decline to 91.9.
In addition, companies have become more pessimistic about the coming six months. The expectations component declined to 91.1 from a revised 93.0 in December.
Companies also assessed their current business situation as worse than last month. This component fell to 89.2 in January from 91.3 in December.
Interest rate differential expectations suggest higher prices for the euro currency longer term.
The British pound is slightly higher after Bank of England Governor Andrew Bailey said there were “lots of issues” with lowering rates below zero.
INTEREST RATE MARKET FUTURES
The 30-year Treasury bond futures are higher.
The Treasury will auction two-year notes.
The Fed will conclude its 2-day monetary policy meeting on Wednesday and is expected to reinforce its commitment to a very accommodative monetary policy and to clarify it will not be tapering its asset purchase program anytime soon.
In light of a likely unchanged fed funds target rate from the Fed at its January 27 policy meeting and its pledge not to hike its fed funds rate until possibly 2023, futures at the short end of the curve are likely to hold steady.
The fundamentals for the 30-year Treasury bond futures on balance turned bearish last August. However, as of about two weeks ago the fundamentals at the long end of the curve have changed and are now mixed.
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2024 ADM Investor Services International Limited.
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.