Written Commentary
Ag Market View for Apr 18.24
April 18, 2024
STOCK INDEX FUTURES
Stock index futures are lower due to renewed prospects of a more hawkish Federal Reserve, along with several weak corporate earnings reports.
In addition, investors remain worried about slowing global economic growth.
Retail sales were unchanged in July when an increase of 0.1% was expected.
Mortgage applications fell 2.3% in the week ending August 12.
The 9:00 June business inventories report is anticipated to be up 1.4%.
Stock index futures are likely to at least partially recover after the minutes from the July 27 Federal Open Market Committee meeting are released at 1:00 central time.
CURRENCY FUTURES
The U.S. dollar remains firm after hawkish remarks from Federal Reserve officials. Several policymakers have pointed out that a dovish pivot is unlikely despite signs that inflation could be peaking.
The euro currency is lower on news that euro zone quarterly economic growth was revised lower to 0.6% in the second quarter of 2022 from a preliminary estimate of 0.7%, and following a 0.5% increase in the first quarter.
The euro is moving closer to the key $1.00 parity level after more data pointed to an economic downturn in the European region
The annual inflation rate in the U.K. increased to 10.1% in July of 2022 from 9.4% in the previous period and slightly above market forecasts of 9.8%. This was the highest reading since February 1982.
INTEREST RATE MARKET FUTURES
The inverted Treasury yield curve continues to flash warnings of economic risks.
Michelle Bowman of the Federal Reserve will speak at 8:30 and at 1:20 this afternoon.
The Treasury will auction 20-year bonds.
According to financial futures markets, there is a 43.5% probability that the Federal Open Market Committee will hike its fed funds rate by 50 basis points and a 56.5% probability that the rate will increase by 75 basis points at the September 21 policy meeting.
Higher prices are likely after this afternoon’s release of the FOMC minutes from its July policy meeting.
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