Written Commentary
STOCK INDEX FUTURES
S&P 500 and Dow futures gapped higher to hit record highs yesterday. However, U.S. stock index futures edged down today.
The International Monetary Fund today is expected to raise its forecasts for this year’s global growth in response to U.S. fiscal stimulus and vaccinations. In January, the IMF predicted the world economy would expand by 5.5% in 2021.
The 9:00 central time February Job Openings and Labor Turnover Survey (JOLTS) is expected to show 6.85 million. The Labor Department’s JOLTS report tracks monthly changes in job openings and offers rates on hiring and quits.
Stock index futures continue to perform well for the news.
CURRENCY FUTURES
The euro area unemployment rate was 8.3% in February, which is above market expectations of 8.1% and up from 7.3% a year ago. The number of unemployed increased by 48,000 after an 8,000 increase in January.
The Reserve Bank of Australia at its policy meeting today left its cash rate unchanged at a record low 10 basis points, as widely expected. Policymakers reaffirmed their commitment to maintaining highly supportive monetary conditions until at least 2024 when actual inflation is sustainably within the 2.0% to 3.0% target. The board also remained committed to the 3-year government bond yield target of 10 basis points.
INTEREST RATE MARKET FUTURES
Futures at the front end of the yield curve are firm, while futures at the long end of the yield curve are higher with the June 30-year Treasury bond futures remaining above a two-month downtrend line.
The June 30-year Treasury bond futures are showing signs of stabilizing by not making news lows when there is bearish news.
Federal Reserve Bank of Cleveland President Loretta Mester yesterday said the U.S. economy’s improving outlook and “great” jobs data for March are not pushing the Federal Reserve to raise interest rates soon.
The Cleveland Fed chief suggested the Fed is not near needing to pare back its current stimulus efforts, which consist of near zero short-term interest rates and $120 billion a month in bond purchases.
In my minority view, I am seeing indications that global economic growth may not be as strong as many analysts are predicting.
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.
