Written Commentary
STOCK INDEX FUTURES
Yesterday S&P 500 and NASDAQ futures advanced to new highs for the year.
Stock index futures are mostly lower today as tech stocks struggled after some disappointing corporate earnings results.
Jobless claims in the week ended July 15 were 228,000 when 241,000 were expected.
The July Philadelphia Federal Reserve manufacturing index was -13.5 when -10.2 was anticipated.
The 9:00 central time June existing home sales report is predicted to show 4.23 million, and the 9:00 June leading indicators are estimated to be down 0.6%.
Expect futures to trade sideways in advance of next week’s Federal Open Market Committee meeting.
CURRENCY FUTURES
Annual producer inflation in Germany slowed to 0.1% in June 2023 when unchanged was expected. The June reading was the lowest since December 2020.
European Central Bank policymakers are likely to continue hiking interest rates in the coming months. The European Central Bank will probably raise interest rates by 25 basis points at its policy meeting on July 27, according to a recent poll. A slight majority are also expecting another hike in September.
The Bank of England will hold its next policy meeting on August 3, and an interest rate increase of 25 basis points is widely anticipated taking policy rates to 5.25%.
Japan’s annual exports grew much less than expected in June. Trade data, released by Japan’s Ministry of Finance, showed exports increased 1.5% year-on-year last month, which is below the 2.3% gain predicted by economists.
A report from the Australian Bureau of Statistics showed net employment increased by 32,600 in June from May. Market forecasts had been for an increase of 15,000.
The jobless rate in Australia held at a downwardly revised 3.5% when analysts had expected 3.6%.
INTEREST RATE MARKET FUTURES
Futures are lower as the yield on the U.S. 10-year Treasury note increased for the first time in four days to 3.82%.
There are no Federal Reserve speakers today with the Federal Reserve in a blackout period.
There is almost a 100% probability that the Federal Open Market Committee will hike its fed funds rate by 25 basis points at the July 26 meeting.
Next week’s likely interest rate increase from the FOMC is probably going to be the last one in this cycle.
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