Written Commentary
Ag Market View for July 26.24
July 26, 2024
STOCK INDEX FUTURES
S&P 500 and Dow futures advanced to record highs and are on track for a second straight week of gains as investors welcomed strong earnings results.
The 9:00 central time August consumer sentiment index is expected to be 81.4.
The fundamentals and technical aspects remain positive for stock index futures.
CURRENCY FUTURES
The euro currency is higher despite news that euro zone exports fell in June for the sixth consecutive month. The European Union’s statistics agency said the currency area’s exports fell by 0.7% in June compared with May, while imports remained flat, adjusted for seasonal variations. The seasonally adjusted trade surplus was 12.4 billion euros compared with 13.8 billion euros in May.
Analysts are anticipating the European Central Bank will remain dovish for some time, after policymakers pledged last month to keep interest rates at record-low levels for even longer in an effort to bring inflation back to its 2.0% target. The updated guidance pushed expectations for an interest rate increase further into the future as the ECB sees inflation below 2.0% until at least 2023.
INTEREST RATE MARKET FUTURES
Futures advanced at the long end of the curve and are steady at the short end of the curve.
The interest rate futures markets have been indicating since May clues about the state of the global economy and inflation with the U.S. Treasury yield curve flattening. A flattening yield curve suggests a slower rate of global economic growth in the future.
There are growing expectations, fueled by some hawkish Fed comments recently that the Fed may use the August 26-28 Jackson Hole Economic Policy Symposium to announce a tapering of its asset-purchase program.
Futures are holding up well for the news. Some traders are questioning why the 30-year Treasury bond futures are substantially off of their May lows, as the bearish tapering talk ramps up.
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.
