PPI Higher Than Anticipated

STOCK INDEX FUTURES

Stock index futures were higher in the overnight trade but came under pressure when the November producer price index report was released. The producer price index increased 0.3% when a gain of 0.2% was expected. On an annualized basis the producer price index increased 7.4% when up 7.2% was anticipated.

groceries with receipt

The 9:00 central time December consumer sentiment index is predicted to be 56.8 and the 9:00 wholesale inventories are estimated to be up 0.8%.

In spite of lower prices today, the fundamentals and technicals for stock index futures remain supportive.

CURRENCY FUTURES

The U.S. dollar index was lower in the overnight trade but advanced when the larger than predicted increase in the producer price index was released.

Interest rate differential expectations are long-term bearish for the greenback, and lower prices are likely.

INTEREST RATE MARKET FUTURES

The 30-year Treasury bond futures were higher in the overnight trade but are lower now in response to the producer price index report.

There are no Federal Reserve speakers today with the Fed’s self-imposed blackout period in force ahead of next week’s Federal Open Market Committee meeting.

Recently the spread between 2-year Treasury and 10-year Treasury note yields inverted by over 80 basis points, the most in 41 years, which has recessionary implications.

According to financial futures markets currently, there is a 75.0% probability that the Federal Open Market Committee will increase its fed funds rate by 50 basis points at the December 14  policy meeting and a 25.0% probability that the rate will be hiked by 75 basis points.

The fundamental and technical aspects have turned more supportive for futures.

 

Interested in more futures markets?  Explore our Market Dashboards here.

Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.

ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.                  

A subsidiary of Archer Daniels Midland Company.

© 2021 ADM Investor Services International Limited.

Futures and options trading involve significant risk of loss and may not be suitable for everyone.  Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.  The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM.  The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared.  The information provided is designed to assist in your analysis and evaluation of the futures and options markets.  However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.

Latest News & Market Commentary

ADM & Industry News

Explore the latest edition of The Ghost in the Machine

Explore Now