SIFs Hit Record Highs Despite Taper Talk
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.
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.
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