Looking to the Futures
Markets Await July CPI as Key Economic Data Takes Center Stage
Futures markets enter Wednesday’s session with CPI on the docket. Equity-index futures were modestly higher, led by E-mini Nasdaq-100 Index Futures (/NQ) up 0.7% to 29934.00 (as of 6:30 AM ET). Wheat futures advance 3.53% to 652.50 ahead of August’s World Agricultural Supply and Demand Estimates and Crop Production (WASDE) report, while Light Sweet crude oil (/CL) reverses its overnight gains and is down 0.18% to 83.05.
The Bureau of Labor Statistics will publish the July Consumer Price Index (CPI) at 8:30 AM ET. In June, headline CPI fell 0.4% from May and rose 3.5% over 12 months. CPI excluding food and energy was unchanged for the month and 2.6% higher year over year (U.S. Bureau of Labor Statistics). July’s CPI is expected to show a slight increase in monthly inflation, of 0.1% in the headline number and 0.2% for the core reading, according to economist polled by Dow Jones. The estimated 12-month rates of 3.4% and 2.5%, remain above the Fed’s 2% target. A hot inflation report could raise alarm for investors who expect this reading to weigh heavily on September’s Federal Open Market Committee Meeting. According to CME’s FedWatch tool probabilities sit slightly in favor of neutral rates with a 48.1% probability of a 25-50 basis points increase and 51.9% probability of rates remaining
Futures on the move
September Light Sweet crude oil futures (/CLU26) were up nearly 1% overnight before reversing its gains. Yemeni authorities said six people were killed on August 11 when Houthi forces fired missiles at a commercial vessel in the Bab el-Mandeb strait (Associated Press). The passage connects the Red Sea with the Gulf of Aden and is important to vessels using the Suez route.
September Kansas City hard-red-winter wheat (/KEU26) leads futures markets higher 3.65% to 724.75 and September Chicago wheat (/ZWU26) gained 3.25% to 650.75, ahead of August’s WASDE report at 12:00 pm ET. The USDA WASDE reports updated acreage, yields, production, inventories and supply-and-use projections relevant to grain, oilseed, cotton and livestock-linked futures (USDA).
Thursday, the July Producer Price Index (PPI) will be delivered at 8:30 AM ET on August 13.
July Retail Sales follow at 8:30 AM ET on Friday, August 14 and will provide information about consumer spending.
Import and export prices are due at 8:30 AM ET on August 18, with industrial production capacity utilization at 9:15 AM ET.
Together, these releases will broaden the evidence on prices, demand and production after CPI.
What else to watch today
Major economic reports, trading events, and news items that could potentially impact specific futures markets:
- MBA Mortgage Applications 7:00 AM ET
- CPI 8:30 AM ET
- EIA Oil Inventories 10:30 AM ET
- 10-Year Note Auction 1:00 PM ET
- Treasury Statement 2:00 PM ET
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