USD Index Futures Modestly Higher on Data

October 27, 2016 5:05AM CDT

Commodities futures markets had a busy morning of domestic and worldwide economic data to comprehend in Thursday’s trading session. Most commodities futures markets remain modestly higher as the morning trading session progresses, with U.S. dollar futures holding steady but falling short of the eight-month highs made on Tuesday.

The December contract in U.S. dollar futures was last up .11 percent at 98.720 after U.K. economic data reflected improvement. Third-quarter GDP numbers in the U.K. showed the economy slowed less than economists forecast in the quarter after the Brexit vote, with the 0.5 percent expansion stronger than the 0.3 percent median forecast from most economists.

Commodities futures analysts say it is a historical tendency for U.S. dollar futures to underperform in the days before a U.S. presidential election.

Meanwhile, U.S. data showed that Durable Goods slipped 0.1 percent in September after a 0.3 percent gain in August and 3.6 percent in July, according to the U.S. Department of Commerce. Most economists surveyed expected a 0.6 percent drop in overall orders, and added that the drop was likely from the U.S. manufacturing industry’s struggles with a strong U.S. dollar, which makes U.S. exports more expensive in foreign markets.

Orders outside of transportation rose 0.2 percent in September, while non-defense orders rose 0.7 percent from August.

Weekly Unemployment Claims fell by 3,000 to 258,000, extending a period of extremely low layoffs last seen by most analysts in the early 1970s. Economists had forecast claims to total 255,000 in the week ending October 22.

Meanwhile, also of relevance to commodities futures markets, New Home Sales grew by 3.1 percent to a seasonally adjusted annual rate of 593,000 units last month, according to the U.S. Department of Commerce. The latest reading brings new home sales close to a nine-year high set in July. Economists had forecast single-family home sales, which account for about 9.8 percent of overall home sales, falling to a rate of 600,000 units last month.

Friday brings Q3 GDP numbers for the U.S., a report that will be closely watched by commodities futures markets participants as speculation continues in regard to the U.S. central bank’s next interest-rate hike. Fed funds futures confidently point to a December rate hike at the November 2 meeting is 9 percent, and remains at 74 percent for the December 13-14 policy meeting.

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