Written Commentary
STOCK INDEX FUTURES
Stock index futures are lower due to Ukraine escalation fears.
The 9:00 central time February existing home sales report is expected to show 6.170 million.
The 9:00 February leading indicators report is anticipated to be up 0.2%.
The dominant influences remain geopolitical tensions and the hawkish Federal Reserve.
CURRENCY FUTURES
The U.S. dollar index is higher in a flight to quality move.
The euro currency is lower on news that the trade balance in the euro area swung to a €27.2 billion deficit in January of 2022 from a €10.7 billion surplus a year ago. This is a record high trade gap as imports jumped 44.3% to €226.7 billion. Exports increased 18.9% to €199.5 billion.
The Japanese yen fell to its lowest level in six years, as the Bank of Japan maintained its dovish policy stance and warned of heightening risks to a fragile economic recovery.
Japan’s central bank at its policy meeting today kept its deposit rate at -0.1% and the 10-year yield target around 0%.
This dovish stance contrasts sharply with other major central banks that are tightening monetary policies.
Lower prices are likely for the Japanese yen.
INTEREST RATE MARKET FUTURES
Federal Reserve Bank of St. Louis President James Bullard today said the central bank’s short-term target rate is “far too low” relative to how the economy is performing and needs to increase quickly to help deal with high levels of inflation.
Federal Reserve speakers today are Thomas Barkin at 11:30 and Charles Evans at 1:00.
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.
