CPI Higher Than Anticipated
STOCK INDEX FUTURES
Stock index futures were higher in the overnight trade due to better than expected corporate earnings reports.
However, prices quickly declined on news that the September consumer price index increased 0.4% when up 0.2% was expected.
On an annualized basis the consumer price index was up 8.2% when a gain of 8.1% was anticipated.
Jobless claims in the week ended October 8 were 228,000 when 225,000 were predicted.
The U.S. dollar index was lower in the overnight trade but reverse when the U.S. consumer price index was released.
Germany’s consumer prices were 10.9% higher year-on-year in September.
The British pound advanced on reports that the U.K. government may reverse parts of its tax-cutting proposals.
The Japanese yen fell to a new 24-year low against the U.S. dollar after Bank of Japan Governor Haruhiko Kuroda pledged to maintain monetary easing to support the Japanese economy.
INTEREST RATE MARKET FUTURES
Yesterday’s release of the of the minutes of the Federal Reserve’s September 21 policy meeting showed policymakers were committed to pushing rates to a restrictive level until there were clear signs that inflation was easing.
Futures came under pressure when the consumer price index report was reported.
Raphael Bostic of the Federal Reserve will speak at 12:00.
The Treasury will auction 30-year bonds today.
According to financial futures markets, there is a 98.0% probability that the Federal Open Market Committee will increase its fed funds rate by 75 basis points at the November 2 policy meeting and a 2.0% probability that the rate will be hiked by 100 basis points.
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