SIF’s Perform Well

STOCK INDEX FUTURES

Stock index futures are higher and are performing well after a neutral July consumer price index.

The July consumer price index increased 0.2% as expected, and on an annualized basis was up 2.9% when a gain of 3.0% was anticipated. The CPI excluding food and energy in July increased 0.2% as forecast, and the CPI excluding food and energy on an annualized basis was up 3.2%, which was the median prediction.

Currently the bearish influence of prospects of a recessionary environment are being offset by expectations that the Federal Reserve will pivot to accommodation in September.

CURRENCY FUTURES

The U.S. dollar index is steady after the July U.S. consumer price index report was released.

The U.S. dollar will probably trend lower in light of indications of a slowing U.S. economy.

Industrial production in the euro area decreased 0.1% month-over-month in June, missing market expectations of a 0.5% increase.

Inflation in the U.K. in July increased less than expected, which bolstered expectations for a Bank of England interest rate cut. The annual rate of consumer price inflation increased to 2.2% after two months at the Bank of England’s 2.0% target. The median estimate was 2.3%.

Financial futures markets are pricing in a 44% probability of a 25 basis point cut in September from the BoE, which is up from 36% before the report was released.

INTEREST RATE MARKET FUTURES

Futures are mixed after the release of the July consumer price index report.

There is now a 59% probability that the Federal Open Market Committee will lower its that funds rate by 25 basis points at its September 18 meeting, and there is a 41% probability that the FOMC will reduce its key rate by 50 basis points in September.

Higher prices are likely for the interest rate market futures.

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