USD Index Futures Hit 11-Month High on Trump Plans

November 16, 2016 5:26AM CST

U.S. dollar index futures continue to benefit from Donald Trump’s plans for boosting the U.S. economy. President-elect Trump’s proposals for a U.S. construction boom propped up the contract to an 11 month high after reaching a 13-month high earlier.

The December contract in U.S. dollar index futures was last up .08 percent at 100.33 within the commodities futures markets.

It continues to be supported by increasing prospects of a fed funds rate increase at the Fed’s December 13-14 policy meeting. Analysts expect the U.S. dollar index futures to remain firm in the meantime.

The probability that the Federal Open Market Committee will increase the fed funds rate at the December 13-14 policy meeting is 91 percent compared to 86 percent yesterday. The probability of a rate hike at the June meeting is 95 percent compared to 93 percent on Tuesday.

High-profile Wall Street analysts are saying that tax cuts, infrastructure spending and the possibility of money flowing back to the U.S. could do serious harm to the economy. Bond manager Bill Gross added that a Trump term will last no more than four years in the White House, and that Trump’s presidency will not fare well for unemployed Americans and those in the lower-wage ranks who make up the majority of his voters. His remarks were heeded by many participants within the commodities futures markets.

U.S. economic reports on the radar for commodities futures markets include the October Industrial Production and Capacity Utilization report. Manufacturing production improved 0.2 percent last month, matching economists’ expectations, according to the U.S. Federal Reserve. Utilities fell by 2.6 percent.

The October Producer Price Index was unchanged in October, following a 0.3 percent increase in September, according to the U.S. Department of Labor. Economists had forecast the PPI rising 0.3 percent last month. In the 12 months through October, the PPI increased 0.8 percent, the biggest gain since December 2014. That followed a 0.7 percent rise in September.

On Thursday, data watchers within the commodities futures markets await the October Consumer Price Index, Housing Starts and Building Permits for the same month, the Philadelphia Fed economic index, and weekly reports on jobless claims and natural gas inventories.

Overseas, U.K. unemployment fell to its lowest level in 11 years in the third quarter, with the jobless rate declining to 4.8 percent from 4.9 percent in the second quarter.

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