Indices in Congestion Pattern
STOCK INDEX FUTURES
Stock index futures have remained in a congestion pattern in the two weeks with the bearish impact of fears of a wider conflict in the Middle East being partially offset by prospects of a less hawkish Federal Reserve.
Jobless claims in the week ended October 14 were 198,000 when 211,000 were expected.
The October Philadelphia Federal Reserve manufacturing index was -9 when -7 was anticipated.
There are two 9:00 central time economic reports. September existing home sales are estimated to be 3.900 million, and the September leading indicators are predicted to be down 0.4%.
Federal Reserve Chair Powell will speak before the Economic Club of New York at 11:00.
I expect Powell’s comments today will be dovish on balance.
The U.S. dollar is lower despite mixed U.S. economic data.
In recent days there appears to be only a limited flight-to-quality flow of funds into the greenback.
The U.S. dollar continues to underperform the news.
Japan’s exports hit a record level in September, climbing for the first time in three months. Export growth was 4.3% when economists expected a 3.1% increase.
Australia’s jobs market grew less than expected in September, while the participation rate unexpectedly declined. The total number of employed people increased by 6,700 in September, which was much weaker than expectations for growth of 18,000 people. The participation rate fell to 66.7% from a record high 67.0% in the prior month.
INTEREST RATE MARKET FUTURES
Traders are closely monitoring comments from Federal Reserve officials this week. In addition to Fed Chair Powell, other Federal Reserve speakers today are Philip Jefferson at 8:00, Austan Goolsbee at 12:20, Michael Barr at 12:30, Raphael Bostic at 3:00, Patrick Harker at 4:30 and Lorie Logan at 5:40.
Recent dovish comments from Federal Reserve officials reduced expectations of another interest rate hike this year.
Financial futures markets are now predicting there is a 97% probability that the Federal Open Market Committee will keep its fed funds rate unchanged and a 3% probability of a 25 basis point increase at its November 1 policy meeting.
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