STOCK INDEX FUTURES
NASDAQ futures advanced to record highs yesterday and again in the overnight trade today despite Wednesday’s hawkish Federal Open Market Committee surprise. The FOMC raised its inflation expectations and moved up the time frame on when it will hike interest rates.
The FOMC indicated that rate hikes could come as soon as 2023, after signaling in March that it saw no increases until at least 2024.
Stock index futures are likely to be higher next week.
The U.S. dollar index is higher since the FOMC meeting after Federal Reserve officials signaled their intention to raise interest rates sooner than previously forecast. Some of the U.S. dollar gains this week are likely to be given back next week.
Producer prices in Germany increased 7.2% year-on-year in May of 2021, which is the strongest growth since October of 2008, and above market expectations of 6.4%.
Retail sales in the U.K. fell 1.4% from a month earlier in May, following a 9.2% increase in April and missing market expectations of a 1.6% advance.
Japan’s consumer prices declined 0.1% year-on-year in May 2021, after a 0.4 % drop in the previous month. This was the eighth straight month of fall in consumer prices.
INTEREST RATE MARKET FUTURES
Despite the hawkish FOMC this week Treasury yields tumbled on Thursday.
The yield on the benchmark 10-year Treasury note traded around 1.5% on Friday, falling from 2-week highs of 1.594% early in the week.
The 30-year Treasury bonds futures hit their highest level in four months despite the hawkish Federal Reserve this week. Could it be that the rate of inflation has already peaked?
GOLD AND SILVER
Now that the hawkish FOMC statement is out of the way, which prompted sizable liquidation, it is likely that there will be recovery next week.
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