Written Commentary
Ag Market View for July 26.24
July 26, 2024
STOCK INDEX FUTURES
Stock index futures are higher after a sharp selloff last week.
Traders are shifting their focus toward the upcoming annual Jackson Hole Economic Symposium, which will start on Thursday.
Powell will speak on Friday morning and is expected to deliver the economic outlook and interest rate guidance for September monetary policy.
Many analysts believe Powell’s comments will be hawkish on balance.
It will be difficult to sustain price gains for stock index futures in advance of the upcoming Jackson Hole Symposium.
CURRENCY FUTURES
The U.S. dollar index is lower but remains near two-month highs. In recent weeks flight to quality buying has been a supportive factor as well as the recently more hawkish comments from Federal Reserve officials.
German producer prices decreased more than expected on the year in July. Producer prices were down 6.0% compared with the same month last year. Analysts had expected a drop of 5.1%.
This was the first year-on-year decline in producer prices since November 2020 and the sharpest decline since October 2009.
INTEREST RATE MARKET FUTURES
Futures are lower across the board.
The majority of Federal Reserve policymakers believe interest rates have not peaked as labor market conditions remain tight and strong wage growth increased the disposable income of households.
Financial futures markets are now predicting there is an 88% probability that the Federal Open Market Committee will keep its fed funds rate unchanged at its September 20 policy meeting, and there is a 12% probability of a 25 basis point increase.
Futures are likely to remain under pressure in advance of the Jackson Hole Symposium.
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