Written Commentary
STOCK INDEX FUTURES
U.S. stock index futures are higher.
The 9:00 central time November consumer sentiment index is expected to be 72.3 and the 9:00 September Job Openings and Labor Turnover Survey is anticipated to show 10.1 million.
There are fears that inflation will stay high for longer-than-expected, which could force central banks to tighten credit policies sooner. In addition, there are supply-chain problems and tight labor market conditions
Countering these bearish influences are the better than expected third quarter corporate earnings reports.
CURRENCY FUTURES
The U.S. dollar index advanced to its highest level since July of 2020. The larger than estimated increase in the U.S. consumer price index, reported on Wednesday, puts pressure on the Federal Reserve to tighten credit conditions, which in turn, is bullish for the U.S. dollar.
Industrial production in the euro area edged down 0.2% month-to-month in September of 2021, following a 1.7% decline in the previous month, but less than market forecasts of a 0.5% fall.
The British pound traded at the lowest level since December of 2020. The U.K. economy grew less than expected in the third quarter and industrial output unexpectedly shrank in September.
The Swiss franc fell to a four-month lower after a Swiss National Bank member said the central bank is now committed to currency market interventions.
Wholesale inflation in Japan hit a four-decade high in October due to rising commodity prices and supply chain bottlenecks.
INTEREST RATE MARKET FUTURES
The 30-year Treasury bond futures are higher despite growing calls for the Federal Reserve to hike its fed funds rate.
In addition, there is pressure on other central banks to tighten credit conditions. In Europe, euro zone money markets priced in two full European Central Bank rate increases by the end of next year. Also, the Bank of England is expected to be the first major central bank to hike rates, probably next month.
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.
