Written Commentary
Ag Market View for Dec 13.24
December 13, 2024
STOCK INDEX FUTURES
Durable goods orders in April declined 1.3% when an increase of 0.7% was expected.
The first quarter gross domestic product increased 6.4%, which compares to the anticipated 6.5% increase.
Jobless claims in the week ended May 22 were 406,000 when 450,000 were predicted.
The 9:00 central time April pending home sales index is estimated to show a 2.0% increase.
The 10:00 May Kansas City Federal Reserve manufacturing index is predicated to be 33.
A congestion pattern is forming now that most likely will be followed by an upside breakout.
CURRENCY FUTURES
The U.S. dollar index was higher in the overnight trade but is lower now in response to the mostly bearish 7:30 U.S. economic reports.
In the longer term, pressure on the U.S. dollar is likely as the U.S. budget deficit grows and the Fed’s balance sheet expands. The next support on the daily chart is the early January low of 89.155.
The euro currency was lower in the overnight session on news that the GfK Consumer Climate Indicator in Germany was weaker than expected coming in at -7.0 heading into June from a revised -8.6 in May and compared with market forecasts of -5.2.
The British pound is not far from an over three-year high hit last week, after a Bank of England policymaker signaled that the central bank might start raising interest rates sooner than expected in 2022, if a stronger than forecast economic rebound in the U.K. develops.
INTEREST RATE MARKET FUTURES
Futures are mostly lower after Randal Quarles of the Federal Reserve on Wednesday said that if the U.S. economy turns in the strong performance he now expects, the door will soon open to a debate about slowing the pace of the central bank’s asset-buying stimulus.
Mr. Quarles said in a virtual appearance held by the Brookings Institution, “I am quite optimistic about the path of the economy.” He said that he expects inflation to temporarily exceed the Fed’s 2.0% target.
Futures were able to partially recover when two of the three U.S. economic reports this morning were weaker than predicted.
The Treasury will auction seven-year notes.
In my minority view, I am seeing indications that the global economy will continue to improve, but growth may not be as strong as many analysts are predicting.
GOLD AND SILVER
Randall Quarles’ comments on tapering pressured futures. However, I would not be surprised to see gold and silver futures recover from the overnight weakness and trade higher on the day.
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.
