Explore Special Offers & White Papers from ADMIS

Stock Index Higher Despite Hawkish Fed


Stock index futures are higher as investors reassess the outlook for monetary policy.

Recent softer-than-expected headline inflation data, including the first decline in producer prices in over two years, prompted traders to speculate that the Federal Reserve may become less hawkish later this year. However, several Federal Reserve policymakers, including San Francisco Federal Reserve Bank President Mary Daly, said a dovish pivot is unlikely and that the central bank needs further evidence of an inflation peak to change its tightening plans.

Import prices in July declined 1.4% when down 0.9% was expected and export prices fell 3.3% when an increase of 0.1% was anticipated.

The 9:00 central time August consumer sentiment index is estimated to be 52.2.

Despite an ongoing hawkish tone to Federal Reserve officials’ comments, stock index futures are performing well.

Candlestick Chart


The U.S. dollar is recovering from its lowest level in over a month due to hawkish remarks from several Federal Reserve policymakers.

The technical aspects are turning neutral for the U.S. dollar.

The output of industrial firms in the euro zone decelerated in June, but still came in above estimates. Monthly industrial production rose by 0.7%,  which is down from the upwardly revised reading of 2.1% in May. Economists had expected an increase of 0.2%.

The U.K. economy contracted in the second quarter. Gross domestic product fell 0.1% in the three months through June. Economists expected a 0.2% decrease in output.


Futures are higher.

The  inverted Treasury yield curve continues to flash warnings of economic risks.

According to financial futures markets, there is a 65.5% probability that the Federal Open Market Committee will hike its fed funds rate by 50 basis points and a 34.5% probability that the rate will increase by 75 basis points at the September 21 policy meeting.

Higher prices are likely across the board for futures despite the hawkish Federal Reserve. 

Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.

ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.                  

A subsidiary of Archer Daniels Midland Company.

© 2021 ADM Investor Services International Limited.

Futures and options trading involve significant risk of loss and may not be suitable for everyone.  Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.  The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM.  The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared.  The information provided is designed to assist in your analysis and evaluation of the futures and options markets.  However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.

Latest News & Market Commentary

Explore Special Offers & White Papers from ADMIS

Get Started