Written Commentary
Ag Market View for September 18.24
September 18, 2024
STOCK INDEX FUTURES
Stock index futures are mixed.
The September Empire State manufacturing index was 11.5 when -3.9 was expected. The New York Federal Reserve conducts this monthly survey of manufacturers in New York state.
Stock index futures have recently performed better than the news would suggest, which should be viewed as a sign of strength.
CURRENCY FUTURES
The U.S. dollar index is lower for a third day in light of an increased possibility of the Federal Reserve becoming more aggressively accommodative this year. There was some recovery when the stronger than anticipated Empire State manufacturing index was reported.
Wages in the euro zone increased 4.5% year-on-year in the second quarter of 2024, following a downwardly revised 5.2% advance in the first quarter.
Switzerland’s producer prices and import prices declined 1.2% year-on-year in August, easing from a 1.7% drop in July.
The Bank of England will hold its policy meeting on September 19. After cutting rates in August, it is widely expected that the BOE’s Monetary Policy Committee will maintain the base rate at 5.0%.
The Bank of Japan will hold its policy meeting on September 20, and no change in policy is forecast. The central bank will probably keep its short-term interest rate at the current level of 25 basis points.
INTEREST RATE MARKET FUTURES
The interest rate market futures initially advanced despite the bearish September Empire State manufacturing index.
The Federal Reserve is widely anticipated to reduce interest rates this week for the first time since March 2020.
Currently there is a 65% probability that the Federal Open Market Committee will lower its funds rate by 50 basis points at its September 18 meeting, and there is a 35% probability that the FOMC will reduce its key interest rate by 25 basis points in September.
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