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Index Futures Perform Well on Today’s News

STOCK INDEX FUTURES

Stock index futures are higher despite rising geopolitical tensions in the Middle East.

Durable goods orders in September declined 0.8% when down 0.5% was anticipated, and durable goods orders excluding transportation increased 0.4%, which compares to the anticipated decline of 0.1%.

The 9:00 central time October consumer sentiment index is estimated to be 69.0.

Futures are performing well on today’s news.

December S&P 500 futures are coming up against a downtrend line, which will probably be soon penetrated.

CURRENCY FUTURES

The U.S. dollar index is slightly lower but remains near its highest level since July 10.

Much of the strength in the greenback recently is linked to flight to quality buying in light of geopolitical tensions in the Middle East and favorable interest rate differentials.

The fundamentals and technicals remain supportive to the U.S. dollar.

German business morale improved more than predicted in October. The Ifo institute said its business climate index increased to 86.5 in October from 85.4 in September. Analysts had forecast a reading of 85.6.

Median expectations for inflation over the next 12 months in the euro area moved down to 2.4% in September, which is a new low since September 2021, and compares to 2.7% in August. Expectations for inflation three years ahead also edged down by 0.2% to 2.1%, and is the lowest level since February 2022. Uncertainty about inflation expectations over the next year remained unchanged.

Traders have fully priced in a 25 basis point interest rate cut from the European Central Bank in December.

Core inflation in Japan’s capital in October fell under the central bank’s 2% target for the first time in five months, which casts doubt on the central bank’s plan to raise interest rates further.

INTEREST RATE MARKET FUTURES

Futures are mixed to higher today after earlier this week the December 30-year U.S. Treasury bond futures declined to the lowest level since July 5.

Susan Collins of the Federal Reserve will speak at 10:00 AM.

Currently there is a 96% probability that the FOMC will lower its fed funds rate by 25 basis points at its November 7 policy meeting, and there is a 4% chance that the FOMC will keep its key interest rate unchanged at 4.75% – 5.00%.

 

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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.

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