Durable Goods Strong

STOCK INDEX FUTURES  

July durable goods orders increased 11.2% when up 4.3% was expected.

Stock index futures are higher with S&P 500 and NASDAQ futures advancing to new record highs.

Traders will be closely watching the U.S. Federal Reserve’s annual Jackson Hole meeting, which begins tomorrow.

U.S. stock index futures continue to have upside momentum.

CURRENCY FUTURES

The U.S. dollar extended its overnight gains when the stronger than anticipated durable goods orders report was released.

Some of the bears on the greenback are speculating that the Federal Reserve may loosen its approach to inflation.

Longer term, the U.S. dollar is likely to trend lower.

Much of the trade today is likely to be evening up ahead of a key speech tomorrow morning by Federal Reserve Chairman Jerome Powell.

Bank of England Governor Andrew Bailey also will address the conference.

INTEREST RATE MARKET FUTURES

The yield on the benchmark 10-year U.S. Treasury note edged up to 0.710% from 0.680% yesterday.

Thomas Barkin of the Federal Reserve will speak at 9:00 central time.

The Treasury will auction five year notes today.

The Kansas City Federal Reserve will hold its 44th Annual Economic Policy Symposium Thursday and Friday.

This virtual event will include international central bankers, Federal Reserve officials, academics and private sector economists participating via an online, live-streamed format.

Federal Reserve Chairman Jerome Powell may signal shifts to the central bank’s approach to managing inflation. There is speculation that the Federal Reserve is willing to let inflation overshoot the 2.0% target in the short run  in order to bring average inflation up to the target.

Interest rate market futures at the short end of the curve are likely to be supported by ideas that major central banks, including the Federal Reserve, will keep short term interest rates low for an extended period.

The next Federal Open Market Committee meeting is scheduled for September 16. Financial futures markets are predicting there is a 92% probability that the FOMC will maintain its fed funds target rate at zero to 25 basis points.

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