Written Commentary
STOCK INDEX FUTURES
President Donald Trump’s health is the latest cause of increased volatility, taking stock index futures lower and adding to the political uncertainty.
Some of the selling in stock index futures is linked to increasingly unlikely prospects that Congress will reach an agreement on the new aid package before the election.
September nonfarm payrolls increased 661,000 when up 894,000 were expected and the unemployment rate was 7.9% when 8.2% was anticipated.
Private payrolls increased 877,000, which compares to the estimate of a gain of 900,000. Manufacturing payrolls were up 66,000 when an increase of 33,000 were predicted.
The 9:00 September consumer sentiment index is expected to be 79.0 and the 9:00 August factory orders report is anticipated to show a 1.0 % increase.
CURRENCY FUTURES
The U.S. dollar index was higher in the overnight trade but has given back some of its gains.
Euro zone inflation fell deeper into negative territory in September, increasing pressure on the European Central Bank to add more stimulus. Annual inflation in the 19 countries sharing the euro fell to minus 0.3% in September, its lowest in over four years, from minus 0.2% a month earlier. This fell short of expectations for an unchanged reading.
The Japanese yen advanced on news that Japan’s consumer confidence improved in September. The survey’s sentiment index for general households, which includes views on incomes and jobs, improved to 32.7 in September from 29.3 in August.
Japan’s August jobless rate was 3.0% as expected.
INTEREST RATE MARKET FUTURES
Flight to quality buying is supporting futures.
Federal Reserve speakers today are Patrick Harker at 8:00 and Neel Kashkari at 12:00.
Financial futures markets are predicting there is a 96.5% probability that the Federal Open Market Committee will keep its fed funds rate unchanged at the November 4-5 policy meeting.
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