Written Commentary
Ag Market View for July 26.24
July 26, 2024
STOCK INDEX FUTURES
U.S. stock index futures were lower in the overnight trade due to weaker stock markets in Asia, but are now steady.
Jobless claims in the week ended September 11 were 332,000 when 312,000 were expected.
Retail sales in August increased 0.7% when a decline of 0.8% was anticipated and the September Philadelphia Federal Reserve manufacturing index was 30.7 when 19.2 was estimated.
The 9:00 central time July business inventories report is predicted to show a 0.5% increase.
S&P 500 futures have been testing an eight-day downtrend line in recent days.
Futures are holding up well despite all the commentary on when the Fed will taper its asset-purchase program.
The fundamental and technical aspects remain supportive for stock index futures.
CURRENCY FUTURES
The U.S. dollar index was supported by two of the three U.S. economic reports this morning coming stronger than expected.
Traders are awaiting the Federal Open Market Committee meeting next week for clarity on when the Fed will start reducing stimulus. Any tapering of the Fed’s asset-purchase program would benefit the U.S. dollar.
Euro zone exports increased in July after six consecutive declines. The European Union’s statistics agency said the currency area’s exports increased 1.0% in July from June, while imports increased 0.3%.
The Japanese yen is lower on news that exports from Japan grew 26.2% year-over-year to JPY 6,606 billion in August 2021, compared with market estimates of a 34.0% increase and after a 37.0% surge in July.
The Canadian dollar is lower on news that housing starts in Canada fell 3.9% over a month earlier to 260,239 units in August, which is the third month of decreases, compared to market expectations of 268,000 units. This was the lowest reading since last December.
INTEREST RATE MARKET FUTURES
The 30-year Treasury bond futures on Tuesday broke out above a two-month symmetrical triangle congestion pattern, but have pulled back to just under the breakout point.
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 dominant fundamental influence, which is the reduced pace of the global economic recovery, will reassert itself after the September 22 FOMC meeting is out of the way.
The longer term trend is higher for the 30-year Treasury bond futures despite the tapering talk.
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