FOMC Begins Two-Day Policy Meeting

STOCK INDEX FUTURES

Stock index futures are mixed to higher.

The employment cost index for the third quarter increased 1.1% when up 1.0% was expected.

The 8:45 central time October Chicago PMI is anticipated to be 45.0, and the 9:00 October consumer confidence index is estimated to be 100.0.

The Federal Open Market Committee begins its two-day policy meeting today and will announce its interest rate decision on Wednesday.

Gains are likely to be limited by the uncertainties of the situation in the Mideast.

CURRENCY FUTURES

The U.S. dollar is a little higher.

In recent weeks there has been only a limited flight-to-quality flow of funds into the greenback, which is a sign of longer-term weakness.

The inflation rate in the euro area declined to 2.9% year-on-year in October 2023, reaching its lowest level since July 2021 and falling slightly under the market consensus of a 3.1% increase.

German retail sales fell unexpectedly by 0.8% in September compared with the previous month when analysts predicted a 0.5% increase.

The Bank of England will hold its policy meeting on Thursday and is expected to leave interest rates unchanged.

The Bank of Japan kept its key short-term interest rate unchanged at -0.1% and that of 10-year bond yields at approximately 0% in its policy meeting today, as widely expected. Also, the central bank removed 1.0% as the upper ceiling on its yield curve control program, although it will keep 1.0% as a reference level.

INTEREST RATE MARKET FUTURES

Futures were higher on reports that upcoming U.S. Treasury refunding auctions may be smaller than previously anticipated.

Financial futures markets are now predicting there is almost a 100% probability that the Federal Open Market Committee will keep its fed funds rate unchanged at its November 1 policy meeting.

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