Written Commentary
US Dollar Likely to Recover
October 8, 2024
STOCK INDEX FUTURES
S&P 500 futures advanced to new record highs yesterday.
Stock index futures are higher across the board today after the August personal income report was released.
Personal income in August increased 0.2% when up 0.4% was expected, and personal consumption expenditures advanced 0.2% when an increase of 0.3% was anticipated.
The PCE price index in August advanced 0.1% as forecast, and the core PCE price index was up 0.1%, which compares to the estimate of up to 0.2%.
The 9:00 central time September consumer sentiment index report is predicted to be 69.0.
Stock index futures have recently performed better than the news would suggest, which should be viewed as a sign of strength.
CURRENCY FUTURES
The U.S. dollar index came under pressure when the weaker than expected U.S. August personal income report was released.
Germany’s jobless rate remained at an over three-year high of 6.0% in September, which is unchanged from the previous month and was in line with market expectations.
The euro zone September economic sentiment index was 96.2 when 96.5 was expected.
The monthly retail sales balance from the Confederation of Business Industry in the U.K., which measures sales compared to the previous year, increased to +4% in September. This is much better than analysts’ expectations of -19 .
INTEREST RATE MARKET FUTURES
Futures advanced across the board when the weaker than expected August personal income report was released.
Federal Reserve Board Governor Michelle Bowman will speak at 12:15 central time. Bowman voted for a 25 basis point interest cut last week, dissenting from the majority 50 basis point cut vote.
It is widely expected that the Federal Open Market Committee will reduce its key interest rate again at its November meeting.
Currently there is a 52% probability that the FOMC will lower its fed funds rate by 50 basis points at its November 7 policy meeting, and there is a 48% chance that the FOMC will reduce its key rate by 25 basis points.
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