STOCK INDEX FUTURES
U.S. stock index futures are higher for a third consecutive day. Yesterday the S&P 500 posted its biggest one-day jump since March.
Mortgage applications in the U.S. increased 2.0% in the week ended December 3, after a 7.2% decline in the previous period. Applications to purchase a home fell 5.0%, data from the Mortgage Bankers Association showed.
The 9:00 central time October Job Openings and Labor Turnover Survey (JOLTS) is expected to show 10.4 million. The Labor Department’s JOLTS report tracks monthly changes in job openings and offers rates on hiring and quits.
The long-term fundamentals remain bullish on balance for stock index futures.
CURRENCY FUTURES
The U.S. dollar index is lower and has fallen under a six-day uptrend line.
The Japanese yen is lower after a report showed Japan’s economy shrank more than initially estimated in the July-September quarter. The world’s third-largest economy contracted 3.6% on an annualized basis. The preliminary estimate released in November indicated the economy contracted an annualized 3.0%.
The Bank of Canada will hold its policy meeting today. The central bank’s key interest rate target is at 25 basis points and is unlikely to be raised as part of the last scheduled rate call for 2021.
INTEREST RATE MARKET FUTURES
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.
Federal Reserve Chair Jerome Powell recently indicated the Fed will discuss speeding up the tapering of its bond-buying program at the central bank’s next meeting on December 15.
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 major central banks are adding more accommodation or delaying the partial removal of easy monetary policies.
The Treasury will auction ten-year notes today.
Most analysts expect a first fed funds rate hike in June or July.
The longer-term trend for the 30-year Treasury bond futures is higher.
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