Written Commentary
CURRENCY FUTURES
Flight to quality buying supported the U.S. dollar index yesterday but prices are lower today.
Since late September interest rate differential expectations have turned against the greenback.
Lower prices are likely for the U.S. dollar.
The euro currency is higher on news that the economic sentiment indicator in the euro area increased 1 point to 93.7 in November 2022, following eight straight months of declines, and slightly beating forecasts of 93.5.
In addition, the employment expectations indicator increased in the euro zone, rising to 107.4 in November from 105.4 in the previous month.
Approvals for house purchases in the U.K. dropped sharply to 59,000 in October 2022, which is down from a revised 66,000 in the previous month and below market expectations of 60,200.
The Swiss economy expanded 0.2% on quarter in the three months to September of 2022, which is below market forecasts of a 0.3% expansion.
STOCK INDEX FUTURES
Stock index futures are mixed today after falling yesterday due to geopolitical risks.
The 9:00 central time November consumer confidence index is expected to be 100.
The fundamentals and technicals for stock index futures are improving.
INTEREST RATE MARKET FUTURES
New York Fed President John Williams said he expects inflation pressures to recede over the next year.
A majority of Federal Reserve policymakers have been hinting that soon it will be appropriate to slow the pace of interest rate hikes. Earlier this month, the Fed delivered its fourth straight 75 basis point rate hike and pushed borrowing costs to the highest since 2008.
According to financial futures markets currently, there is a 70.0% probability that the Federal Open Market Committee will increase its fed funds rate by 50 basis points at the December 14 meeting and a 30.0% probability that the rate will be hiked by 75 basis points.
The fundamental and technical aspects have turned more supportive.
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