STOCK INDEX FUTURES
Stock index futures declined in the overnight trade due to disappointing corporate earnings reports.
This morning’s economic reports were mixed.
According to Challenger, Gray & Christmas, Inc., U.S. employers announced 55,597 job cuts in October 2024, which was below 72,821 in September, but over 50.9% from 36,836 in October 2023.
Jobless claims in the week ended October 26 were 216,000 when 235,000 were expected.
Personal income in September increased 0.3% when a gain of 0.4% was anticipated, and personal consumption expenditures advanced 0.5% when a gain of 0.4% was estimated.
The employment cost index for the third quarter increased 0.8% when a 1.0% advance was predicted.
The 8:45 central time Chicago PMI is estimated to be 47.3.
CURRENCY FUTURES
The U.S. dollar index is a little lower today but remains near its highest level since July 3.
This morning’s U.S. economic reports were offsetting influences on the greenback.
Much of the recent strength in the U.S. dollar is linked to flight to quality buying due to geopolitical tensions in the Middle East and favorable interest rate differentials.
The fundamentals and technicals remain supportive to the U.S. dollar, and higher prices are likely.
Annual inflation in the euro area accelerated to 2.0% in October 2024, which is up from 1.7% in September and is slightly above forecasts of 1.9%.
Traders still anticipate the European Central Bank will lower its key deposit facility rate by 25 basis points at its December 12 policy meeting, which would be the fourth interest rate cut following reductions in October, September and June.
The Bank of Japan unanimously decided to maintain its key short-term interest rate at around 0.25% at its policy meeting today, keeping it at the highest level since 2008 and matching market predictions. Most economists now see no interest rate hike until the first quarter of 2025.
INTEREST RATE MARKET FUTURES
Futures are unchanged at the front of the yield curve and are lower at the long end of the yield curve.
Currently there is a 96% probability that the Federal Open Market Committee 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%.
The December 30-year U.S. Treasury bond futures will probably be the weakest performer in the interest rate market futures complex.
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