Written Commentary
STOCK INDEX FUTURES
S&P 500 and NASDAQ futures advanced to record highs yesterday.
Mortgage applications increased 4.2% in the week ending June 11, which is the first increase in four weeks, data from the Mortgage Bankers Association showed.
Housing starts in May were 1.572 million when 1.630 million were expected and building permits were 1.681 million, which compares to the anticipated 1.738 million.
The June Atlanta Federal Reserve business inflation expectations report will be released at 9:00 central time. The figure in May was 2.8%.
Attention now turns to the Federal Reserve’s monetary policy statement and Fed Chair Powell’s press conference.
Stock index futures continue to have positive technical action.
CURRENCY FUTURES
The U.S. dollar index is lower.
In the longer term, pressure on the U.S. dollar is likely as the U.S. budget deficit grows and the Fed’s balance sheet expands. The next major support on the daily chart for the September U.S. dollar index is the May low of 89.545.
Hourly labor costs in the euro area increased 1.5% year-on-year in the first quarter of 2021, easing from a downwardly revised 2.8 % advance in the previous three-month period. This was the smallest increase in labor costs since the last quarter of 2016.
The annual inflation rate in the U.K. climbed to 2.1% in May, which is the highest since July 2019 and above market expectations of a 1.8% increase.
Japan’s exports increased in May for the third straight month. Japan’s exports rose 49.6% in May from a year earlier. That compares with April’s 38.0% increase, but was weaker than the 51.4% increase expected by economists.
INTEREST RATE MARKET FUTURES
Futures advanced when the weak housing starts report was released.
The Federal Open Market Committee will conclude its two-day policy meeting today. A statement will be released at 1:00 p.m. central time and Federal Reserve Chairman Jerome Powell will hold a press conference at 1:30 p.m.
The FOMC will likely maintain its fed funds target range at zero to 25 basis points and bond-buying at a $120 billion monthly pace.
Traders will focus on the statement language, updated economic projections, the timing of when the Fed will taper its asset-purchase program and Powell’s post meeting press conference.
GOLD AND SILVER
Once the FOMC meeting is out of the way the precious metals will likely resume their uptrend.
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.
