Written Commentary
STOCK INDEX FUTURES
Stock index futures were lower in the overnight trade after Federal Reserve speakers offered no clues as to when the central bank will become less hawkish.
U.S. based employers announced 29,989 cuts in September, which is a 46.4% increase from the 20,485 cuts announced in August. This is 67.6% higher than the 17,898 cuts announced in the same month last year, according to a report released today from global outplacement and business and executive coaching firm Challenger, Gray & Christmas, Inc.
Jobless claims in the week ended October 1 were 219,000 when 203,000 were expected.
On Monday futures broke out above major downtrend lines.
CURRENCY FUTURES
The U.S. dollar index is higher due to ongoing hawkish Federal Reserve comments.
However, it appears that the U.S. dollar has topped for now on the belief that the Federal Reserve may soon tone down its hawkish rhetoric.
The problems of Europe’s largest manufacturing sector continued in August, as incoming orders to German factories registered their biggest drop in five months. New orders fell 2.4% from July, and were down 4.1% from a year ago. Analysts had expected a gain of 0.7%.
Retail sales In the euro area decreased 0.3% in August of 2022 over the previous month, which is the third monthly decline.
INTEREST RATE MARKET FUTURES
Futures are mostly higher despite Federal Reserve officials repeating the mantra that they do not plan to lower interest rates next year.
There was some support when the larger than anticipated jobless claims report was reported.
These remarks reinforced the message that the U.S. central bank will continue to increase interest rates following 75 basis point increases at their last three policy meetings.
Federal Reserve speakers today are Loretta Mester at 7:50, Charles Evans at 12:00, Lisa Cook at 12:00, Christopher Waller at 4:00 and Loretta Mester at 5:30.
According to financial futures markets, there is a 32.0% probability that the Federal Open Market Committee will hike its fed funds rate by 50 basis points and a 67.0% probability that the rate will increase by 75 basis points at the November 2 policy meeting.
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