Tariff News Dominates Trade

STOCK INDEX FUTURES

Stock index futures are lower on Monday after President Donald Trump imposed new tariffs on major trading partners over the weekend, ramping up concerns about the potential impact on the economy. The U.S. introduced a 25% tariff on goods from Mexico and Canada, alongside a 10% levy on imports from China.

The 8:45 central time January Manufacturing PMI is expected to be 50.1.

The 9:00 January Institute for Supply Management manufacturing index is anticipated to be 49.5, and the 9:00 December construction spending report is estimated to show a 0.3% increase.

The U.S. economy is likely to hold up better than economies elsewhere in the world.

CURRENCY FUTURES

The U.S. dollar index surged over 1.0% on Monday, approaching two-year highs after President Donald Trump imposed tariffs on key trading partners over the weekend.

On the daily March U.S. dollar index chart, prices on January 24 declined below a double bottom pattern at 107.545.  There was only limited follow-through to the downside before a recovery when prices advanced above the double bottom breakout level. This suggested the double bottom chart sell signal was a false sell signal.

The annual inflation rate in the euro area edged up to 2.5% in January 2025 from 2.4% in December, which was slightly above market expectations of 2.4%.

The S&P Global Purchasing Managers’ Index for U.K. manufacturing, which separates growth from contraction, remained under the 50 mark for the fourth consecutive month.

The Bank of England is widely expected to lower its Bank Rate by 25 basis points to 4.5% at its policy meeting on Thursday.

The Canadian dollar fell past 1.47 per U.S. dollar, reaching its weakest level since April 2003, following the imposition of 25% tariffs on Canadian imports by U.S. President Donald Trump.

INTEREST RATE MARKET FUTURES

Futures are steady at the front of the yield curve and higher at mid-curve and at the long end of the yield curve.

Federal Reserve speakers today are Raphael Bostic at 11:30 and Alberto Musalem at 5:30 PM.

Financial futures market are predicting the FOMC will reduce its fed fund rate by 25 basis points at its June 18 policy meeting.

 

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

Explore the latest edition of The Ghost in the Machine

Explore Now