Written Commentary
STOCK INDEX FUTURES
Stock index futures are higher.
There are no major economic reports scheduled for today. However, there are several potentially market moving reports scheduled for later this week.
On Tuesday the producer price index for July is expected to be up 0.2%, and on Wednesday the July consumer price index is predicted to advance 0.2%. Retail sales for July to be released on Thursday are forecast to show a 0.3% gain, and Friday’s August consumer sentiment index is estimated to be 67.0.
Currently the bearish influence of prospects of a recessionary environment are being offset by expectations that the Federal Reserve will pivot to accommodation in September.
CURRENCY FUTURES
The U.S. dollar index is higher.
However, in the longer term, the U.S. dollar will probably trend lower in light of indications of a slowing U.S. economy.
Bank of England policymaker Catherine Mann said she is still concerned about upside risks to inflation.
Despite these comments the Bank of England still appears to be on track to lower its key interest rate at its November 7 policy meeting.
INTEREST RATE MARKET FUTURES
Futures our mixed to lower.
There is now a 51% probability that the Federal Open Market Committee will lower its that funds rate by 25 basis points at its September 18 meeting, and there is a 49% probability that the FOMC will reduce its key rate by 50 basis points in September.
Higher prices are likely for the interest rate market futures longer term.
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