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Posted July 30, 2025 at 12:42 pm
Opinion: I highlight some undervalued forecast contracts that I’ve identified below that are relevant to this morning and tomorrow’s economic calendar.
I like a combination trade in tomorrow’s PCE price index due to it being so well telegraphed by Wall Street.
The median estimate is 2.5%. I think the chance of a 0.2% rise in the EU’s unemployment rate is near zero. The median estimate calls for a steady 6.3% so I like the “No” at 6.4%.
I like a range combination trade in tomorrow’s Hong Kong GDP because 1.2% is far too low and 5.2% way too high. But the contract expires in 15 days, however, since it’s linked to the final and not the initial estimate. Furthermore, we haven’t seen the figure break that range since 2022.
Today’s initial US GDP print is helpful to position for the final print roughly two months from now while collecting interest-like incentive coupons that annualize at 3.83% and shift in proportion to contract value. The rate will also move at the same degree that the Federal Reserve adjusts its benchmark. The average absolute level of revisions since 2022 has been 0.4%, so in light of this morning’s 3% figure, I like the “Yeses” at 2.1% and below.
Meanwhile, a positive GDP is almost always accompanied with a positive corporate profits report released in GDP’s second estimate roughly a month from today so I point to all “Yeses” there below 0. And then as we begin the third quarter and data come in, it’s pretty clear that we won’t fall into a technical recession this year, which requires two consecutive negative GDP prints. So, I like the “No” for US recession related to Q2, Q3 and Q4.
Source for Images: ForecastEx
Note: Prices are highest bids as of the morning of July 30, 2025. Red circles around the thresholds were inserted by J. Torres to highlight his preferred “Yes” and “No” answers throughout different levels.
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This material is from IBKR Macroeconomics, an affiliate of Interactive Brokers LLC, and is being posted with its permission. The views expressed in this material are solely those of the author and/or IBKR Macroeconomics and Interactive Brokers is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to buy or sell any security. It should not be construed as research or investment advice or a recommendation to buy, sell or hold any security or commodity. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
Interactive Brokers LLC is a CFTC-registered Futures Commission Merchant and a clearing member and affiliate of ForecastEx LLC (“ForecastEx”). ForecastEx is a CFTC-registered Designated Contract Market and Derivatives Clearing Organization. Interactive Brokers LLC provides access to ForecastEx forecast contracts for eligible customers. Interactive Brokers LLC does not make recommendations with respect to any products available on its platform, including those offered by ForecastEx.
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