Written Commentary
Wkly Futures Market Summary For 2.10.2025
February 10, 2025
STOCK INDEX FUTURES
U.S. stock index futures are mixed to lower ahead of a busy week of central bank decisions in major economies.
Traders will be watching monetary policy decision by the Federal Reserve and announcements from the Bank of England, the European Central Bank and the Bank of Japan later this week. All are due to provide an update on the price outlook and policy guidance for next year.
The long-term fundamentals remain bullish on balance for stock index futures.
CURRENCY FUTURES
Central bank meetings scheduled for this week are the Federal Reserve on December 15th, the European Central Bank on December 16th, the Bank of England on the 16th and the Bank of Japan on the 17th.
The Fed is expected to accelerate the pace at which it is paring its bond-buying program and to signal that it will raise interest rates next year.
Policymakers in the euro area are due to decide on the future of its bond-buying program.
Divergent monetary policies continued to pressure the Japanese yen, as hawkish signals from the Federal Reserve contrast with the Bank of Japan’s commitment to retain easy monetary policies to achieve its 2.0% price stability target, but is expected to consider whether to scale-back pandemic-related emergency funding.
Wholesale prices in Germany jumped a record 16.6% year-on-year in November of 2021, after a 15.2% increase in the previous month.
Japan’s core machinery orders increased 3.8% on the month when an increase of 2.1% was anticipated.
INTEREST RATE MARKET FUTURES
The 30-year Treasury bond futures were higher on Friday despite news that consumer prices increased in November at the fastest annual rate since 1982.
The yield curve has flattened recently, with yields on shorter-dated issues rising and yields on longer-dated issues ticking down, which is an indication of a slowing economy.
If the U.S. economy weakens, it may be difficult for the Fed to justify an accelerated taper of its asset-purchase program, especially now that other central banks are adding more accommodation or are delaying the partial removal of easy-monetary policies.
I am anticipating a new leg higher for the 30-year Treasury bond futures after the Federal Open Market Committee meeting is out of the way.
The longer-term trend for the 30-year Treasury bond futures is higher.
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