Written Commentary
CURRENCY FUTURES
The U.S. dollar is lower in response to the U.S. employment report.
Industrial production in Germany unexpectedly declined by 0.2% month-over-month in May 2023 when unchanged was expected and following April’s 0.3% gain.
The U.K. Halifax house price index fell by 2.6% year-on-year in June 2023, which is the largest decline since June 2011.
Canada recorded a surprise trade deficit in May, which may be an indication that economic growth may be slowing.
Japan’s all-house spending declined 4.0% year-on-year when down 2.4% was predicted.
STOCK INDEX FUTURES
Nonfarm payrolls in June were up 209,000 when an increase of 213,000 was expected.
Private payrolls increased by 149,000 when a gain of 199,000 was anticipated, and manufacturing payrolls were up 7,000 when up 5,000 was predicted.
The unemployment rate was 3.6% as estimated.
Average hourly earnings increased 0.4% on the month when up 0.3% was predicted.
With no major Federal Reserve speakers scheduled today, stock index futures are likely to recover from the current lower levels.
INTEREST RATE MARKET FUTURES
Futures are mixed.
The Food and Agriculture Organization of the United Nations food price index fell for a second month to a new two-year low of 122.3 in June 2023. The reading is also well under the record peak of 159.7 that was reached in March last year.
Financial futures markets are predicting there is a 92% probability that the Federal Open Market Committee will hike its fed funds rate by 25 basis points at the July 26 meeting, and there is an 8% chance that the fed funds rate will remain unchanged.
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