Written Commentary
CURRENCY FUTURES
The U.S. dollar index extended its decline today as interest rate differential expectation turn against the greenback.
The U.S. dollar is now at its lowest level since August 18.
The U.S. dollar has underperformed in the last two months.
The British pound extended gains to trade above the $1.17 mark for the first time late August. Data showed the U.K. economy contracted 0.2% in the third quarter, which is less than markets had expected.
STOCK INDEX FUTURES
Stock index futures are higher building on the momentum from last session’s sharp advance as investors reassessed the outlook for monetary policy.
A smaller than expected increase in U.S. inflation reinforced the belief that the Federal Reserve will slow the pace of its interest rate hikes.
The 9:00 central time November consumer sentiment index is expected to be 59.6.
The fundamentals for stock index futures are improving.
INTEREST RATE MARKET FUTURES
Federal Reserve officials welcomed Thursday’s news showing that inflation increased less than expected last month.
Dallas Federal Reserve Bank President Lorie Logan called the consumer price index report “a welcome relief,” but noted more rate increases probably are coming, although at a slower pace.
According to financial futures markets currently, there is an 85.0% probability that the Federal Open Market Committee will increase its fed funds rate by 50 basis points at the December 14 meeting and a 15.0% probability that the rate will be hiked by 75 basis points.
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