Written Commentary
INTEREST RATE MARKET FUTURES
Futures were higher yesterday due to the bullish September Automated Data Processing, Inc. employment report, which showed an increase of only 89,000 when up 150,000 was expected.
Prices are mixed today in advance of comments from several Federal Reserve officials today.
Federal Reserve speakers today are Loretta Mester at 8:00, Thomas Barkin at 10:30, Mary Daly at 11:00 and Michael Barr at 11:15.
Financial futures markets are predicting there is an 80% probability that the Federal Open Market Committee will keep its fed funds rate unchanged and a 20% probability of a 25 basis point increase at its November 1 policy meeting.
STOCK INDEX FUTURES
Stock index futures are lower.
Outplacement firm Challenger, Gray & Christmas said announced job cuts by U.S.-based employers in September declined approximately 37% from August. However, cuts for last month still marked a 58% increase from September 2022. Third quarter cuts were up 92% from the third quarter 2022.
Jobless claims in the week ended September 30 were 207,000 when 210,000 were expected.
CURRENCY FUTURES
The U.S. dollar peaked on October 3 when there were reports that the Bank of Japan intervened in foreign exchange markets to support the yen by selling U.S. dollars and buying yen.
Sentiment among small and mid-sized businesses in Germany is back to near pandemic lows, according to a survey released today. A study by Creditreform, which surveyed approximately 1,200 firms, showed morale slipped back into negative territory for the first time since 2020. The index fell to -1.2 points in 2023.
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