Written Commentary
STOCK INDEX FUTURES
U.S. stock index futures are higher and remain close to record highs.
The July National Federation of Independent Business small business optimism index was 99.7 when 103.3 was expected. This index is compiled from a survey that is conducted every month by the National Federation of Independent Business of its members.
Nonfarm productivity in the second quarter on an annualized basis increased 2.3% when a 3.5% advance was anticipated and annualized unit labor costs were up 1.0% when a gain of 1.2% was predicated.
The fundamentals and technical aspects remain positive for U.S. stock index futures.
CURRENCY FUTURES
The U.S. dollar index is higher due to safe-haven flows of funds.
The euro currency is lower on news that the ZEW Indicator of Economic Sentiment for Germany declined 22.9 points to 40.4 in August, which is the lowest level since November and below market expectations of 56.7. This was the third monthly decline in investor confidence.
National Australia Bank’s business confidence index fell 19 points to -8 points in July, while its business conditions index dropped 14 points to 11.
ANZ Bank reported that consumer confidence fell 3.1% in the last week.
INTEREST RATE MARKET FUTURES
Charles Evans of the Federal Reserve will speak at 1:30 central time.
The interest rate futures markets have been indicating since May clues about the state of the global economy with the U.S. Treasury yield curve flattening for several months. Shorter-dated yields have been steady, while longer-dated yields have declined.
A flattening yield curve suggests a slower rate of global economic growth in the future.
Futures are holding up well for the news. Some traders are questioning why the 30-year Treasury bond futures are 10 full points off of their May lows, as tapering talk ramps up.
The Federal Reserve Bank of Kansas City is proceeding with plans to host a modified, in-person program for this year’s Economic Policy Symposium in Jackson Hole, Wyoming on August 26-28.
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