Written Commentary
Ag Market View for July 26.24
July 26, 2024
STOCK INDEX FUTURES
Stock index futures are mixed to lower.
Mortgage applications in the U.S. declined 2.9% in the week ending September 1, hitting the lowest level since December 1996, according to data from the Mortgage Bankers Association. Applications to refinance a home loan fell 4.7% and those to buy a home were down 2.1%.
The 8:45 central time August PMI services index is expected to be 51.0.
The 9:00 August Institute for Supply Management services index is anticipated to be 52.4.
Major downtrend lines were taken out to the upside last week as the fundamentals have improved recently in the form of expectations of a less hawkish Federal Reserve.
CURRENCY FUTURES
Yesterday the U.S. dollar index advanced to its highest level since March 9. Some of the recent strength in the greenback is due to disappointing data in Asia and Europe.
The U.S. dollar is a little lower today but is likely to recover.
Interest rate differential expectations remain favorable for the greenback, especially against the European currencies, since the U.S. economy appears to be holding up relatively well compared to economies in Europe.
Longer term, higher prices are likely for the U.S. dollar and lower prices are likely for all the other major currencies.
Retail sales in the euro area decreased 0.2% month-over-month in July, following an upwardly revised 0.2% increase in June, compared with market expectations of a 0.1% drop.
Germany factory orders fell 11.7% at the start of the third quarter from June, which is much worse than the 4.3% drop expected by economists and the worst since 2020.
The Australian economy expanded 0.4% on a quarter-to-quarter basis in the second quarter, which is above market forecasts of a 0.3% growth.
The Bank of Canada is widely expected to leave its policy rate unchanged at 5.00% when it concludes the September policy meeting today, following the 25 basis points rate hike announced in July.
INTEREST RATE MARKET FUTURES
Futures are higher.
At 1:00 the Federal Open Market Committee will release its Beige Book. This book is produced approximately two weeks before the monetary policy meetings of the Federal Open Market Committee. On each occasion, a different Federal Reserve district bank compiles evidence of economic conditions from each of the 12 Federal Reserve districts.
Financial futures markets are predicting there is a 93% probability that the Federal Open Market Committee will keep its fed funds rate unchanged at its September 20 policy meeting, and there is a 7% probability of a 25 basis point increase.
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.
