Written Commentary
Ag Market View for July 26.24
July 26, 2024
STOCK INDEX FUTURES
Stock index futures are higher on limited market moving news.
Investors are looking ahead to Tuesday’s release of the August consumer price index report. The CPI report tomorrow will provide clues on inflationary pressures, and retail sales and industrial production due later this week will also give an update on the economy.
Overall, the fundamentals and technical aspects remain positive for stock index futures.
CURRENCY FUTURES
The U.S. dollar index advanced to a three-week high.
Longer term, the U.S. dollar is likely to be supported by a safe-haven flow of funds.
The euro currency is lower despite news that wholesale prices in Germany increased 12.3% year-on-year in August, which is the highest rate since October 1974.
On the monetary policy front, Bank of England governor Andrew Bailey last week said the central bank will probably raise interest rates over the next two to three years, while policymaker Michael Saunders said the central bank may need to hike interest rates next year if growth continues.
INTEREST RATE MARKET FUTURES
The 30-year Treasury bond futures are higher.
Traders continue to focus on when the Federal Reserve will taper its $120 billion a month in asset purchases.
Some analysts pushed back expectations for when the Federal Reserve will begin reducing bond purchases after a disappointing payrolls report. However, several Fed officials have been supporting tapering to begin this year. I believe a tapering will be later rather than sooner, and when it is implemented it will be a dovish tapering with any reduction being small.
Also, the longer term trend is higher for the 30-year Treasury bond futures as the rate of growth in the global economy slows.
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