Geopolitical Worries Support 30Yr Bonds
STOCK INDEX FUTURES
U.S. stock index futures declined, tracking lower overseas equities as traders watched for the potential ripple effects of the default of a major overseas real estate company, concerns about the pace of the global economic recovery, ongoing debates over the debt limit in Washington and the Federal Reserve deciding on potentially tapering its stimulus.
The 9:00 central time September housing market index is expected to be 75.
A new move higher is likely for stock index futures after the Federal Open Market Committee meeting on Wednesday is out of the way.
In a flight to quality move the dollar index strengthened for a third consecutive session to the highest level since August 24.
In addition, the Swiss franc and the Japanese yen are higher, which are also considered to be flight to quality vehicles.
The euro currency is lower despite news that Germany’s producer prices surged 12.0% from a year earlier in August 2021, accelerating from a 10.4% increase in the previous month and beating market expectations of up 11.4 %. This was the largest increase in producer costs since December 1974.
The Bank of England will hold its monetary policy meeting on September 23.
INTEREST RATE MARKET FUTURES
Flight to safety is supporting futures, especially the thirty-year Treasury bond futures.
Traders are looking ahead to the September 22 Federal Open Market Committee meeting for guidance as to when the Federal Reserve will taper its $120 billion a month in asset purchases.
The consensus is for an actual announcement to be delayed until the November or December meetings.
The dominant bullish fundamental influence is the reduced pace of the global economic recovery.
Higher prices are likely for the thirty-year Treasury bond futures.
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2021 ADM Investor Services International Limited.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.