Written Commentary
CURRENCY FUTURES
The dollar index weakened on Monday, hovering near its lowest levels in 11 weeks as recent economic reports reinforced beliefs that the Federal Reserve has reached the end of its tightening cycle.
Severe technical damage was done to the greenback last week when major trendlines were penetrated on the downside.
Producer prices in Germany declined by 11.0% year-over- year in October 2023, matching market forecasts and following September’s record drop of 14.7%.
STOCK INDEX FUTURES
Stock index futures are higher.
The 9:00 central time October leading indicators report is expected to show a 0.6% decline.
The technical aspects have become much more supportive to stock index futures.
INTEREST RATE MARKET FUTURES
Futures are mostly lower, especially at the long end of the curve.
The Treasury will auction 20-year bonds.
Richmond Federal Reserve Bank President Tom Barkin will have a television appearance at 11:00.
Despite recent hawkish comments from Federal Reserve officials, there is a growing consensus that the Federal Reserve has concluded its rate hiking cycle.
Financial futures markets are predicting there is almost a 100% probability that the Federal Open Market Committee will keep its fed funds rate unchanged at its December 13 policy meeting.
Futures at the front end of the yield curve are likely to perform better than futures at the long end of the curve, especially the 30-year bonds.
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