Written Commentary
Ag Market View for Jan 14.25
January 14, 2025
CURRENCY FUTURES
The U.S. dollar index is lower as traders continue to believe that the Federal Reserve has reached the end of its tightening cycle.
Severe technical damage was done to the greenback earlier this month and in late October when major trendlines were penetrated on the downside.
The U.S. dollar continues to underperform the news, and lower prices are likely.
Sentiment among German exporters improved in November. An export expectations indicator improved to -3.8 in November from -6.3 in October.
The Confederation of British Industry’s monthly retail sales balance improved to -11.0 in November 2023 from -36.0 in the previous month, which compares to market forecasts of -30.0.
Bank of England Governor Andrew Bailey suggested interest rate reductions are unlikely for the “foreseeable future” as he warned that the second half of the inflation battle will be “hard work.”
STOCK INDEX FUTURES
Stock index futures are lower.
The 9:00 central time October new home sales report is expected to be 725,000, and the 9:30 November Dallas Federal Reserve manufacturing index is anticipated to be -16.5.
The technical aspects have become much more supportive to stock index futures.
INTEREST RATE MARKET FUTURES
Futures are mixed to higher.
Despite recent hawkish comments from Federal Reserve officials, there is a growing consensus that the Federal Reserve has concluded its rate hiking cycle.
The Treasury will auction two-year notes and five-year notes.
Financial futures markets are predicting there is a 94% probability that the Federal Open Market Committee will keep its fed funds rate unchanged at its December 13 policy meeting.
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