Written Commentary
Wkly Futures Market Summary For 2.10.2025
February 10, 2025
STOCK INDEX FUTURES
Stock index futures are sharply lower today following Friday’s sell-off due to increasing worries over a potential U.S. economic slowdown and recession.
On Friday it was reported that nonfarm payrolls in July increased only 114,000 when up 180,000 were expected, and the unemployment rate increased to 4.3%, which compares to the anticipated 4.1%.
The 8:45 central time July PMI composite final is expected to be 55.0, and the July Institute for Supply Management Services Index is anticipated to be 51.0.
Coming easier credit policies from the Federal Reserve will eventually rescue stock index futures. However, in the meantime there are better opportunities in the currencies and interest rate market futures.
CURRENCY FUTURES
The U.S. Dollar Index fell to its lowest level since mid-January extending last week’s decline. There are mounting concerns about an economic slowdown in the U.S., which could prompt the Federal Reserve to pivot more quickly to an accommodative monetary stance.
Longer term, the U.S. dollar is likely to trend lower due to prospects of a more aggressively accommodative Federal Reserve.
Producer prices in the euro area increased 0.5% month-over-month in June, surpassing expectations of a 0.4% increase after a 0.2% decrease in May.
The Japanese yen advanced, hitting its highest levels since early January on the belief that the Bank of Japan will hike interest rates further in the coming months, while the U.S. Federal Reserve will likely aggressively lower interest rates.
INTEREST RATE MARKET FUTURES
Futures across the board extended Friday’s gains and advanced to new highs for the move in a flight to quality flow of funds.
The yield on the U.S. 10-year Treasury note fell under 3.70% on Monday, hitting its lowest levels in over a year on the belief that the Federal Reserve will cut interest rates more aggressively after Friday’s weak U.S. jobs.
Mary Daly of the Federal Reserve will speak in 4:00 PM.
In light of Friday’s weak employment report, there has been a dramatic shift in the outlook for Federal Reserve policy. There is now an 85% probability that the Federal Open Market Committee will lower its fed funds rate by 50 basis points at its September 18 meeting and there is a 15% probability that the Fed will lower its rate by 75 basis points.
Traders cannot rule out the possibility that the Federal Reserve could convene an emergency meeting and decide to lower its fed funds rate before the scheduled September 18 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.
