STOCK INDEX FUTURES
Stock index futures are lower due to hawkish remarks from Federal Reserve officials last week.
Federal Reserve Governor Christopher Waller warned on Friday “core inflation is not coming down like I thought it would.” Richmond Fed President Thomas Barkin said he was “comfortable” with additional interest rate increases given that inflation was still not on the path back to 2.0%.
Housing starts in May were 1.631 million when 1.400 million were expected and permits were 1.491 million when 1.433 million were anticipated.
Federal Reserve Chair Jerome Powell will testify before the House of Representatives Financial Services Committee tomorrow at 9:00, and before the Senate Banking Committee on Thursday at 9:00 as part of his semi-annual report on U.S. monetary policy to lawmakers.
Futures continue to overperform the news.
CURRENCY FUTURES
After falling to four-week low last week, the U.S. dollar index is higher today.
German producer prices increased at their slowest pace in over two years in May. Producer prices of industrial products were up 1.0% compared with May 2022, which was the lowest producer inflation since January 2021.
Analysts estimated an increase of 1.7% year-on-year, after producer prices in April increased 4.1% on the year.
INTEREST RATE MARKET FUTURES
New York Fed’s John Williams and Fed Vice Chair Michael Barr will speak at an event at 10:45 central time.
Financial futures markets are predicting there is a 77% 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 a 23% chance that the fed funds rate will remain unchanged.
Last week the Federal Open Market Committee indicated there will be two more fed funds rate hikes this year. However, financial futures markets pricing suggests the FOMC can only increase rates one more time in 2023.
Interested in more futures markets? Explore our Market Dashboards here.
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.
© 2021 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.