Written Commentary
STOCK INDEX FUTURES
Mortgage applications fell 5.4% in the week ended February 11, following an 8.1% drop in the previous period, according to data from the Mortgage Bankers Association. The refinancing index plunged 8.9%.
Retail sales in January increased 3.8% when up 2.0% was expected.
The price index for U.S. imports increased 2.0% from a month earlier in January of 2022, which is the most since April 2011, and above market expectations of 1.3%.
Prices for U.S. exports were up 2.9% month-over-month in January of 2022, which is the largest one-month advance on record, and beating market expectations of a 1.3% gain.
Industrial production in January increased 1.4% when up 0.4% was anticipated and capacity utilization was 77.6% when 76.7% was predicted.
The 9:00 central time December business inventories report is expected to show a 1.8% increase, and the 9:00 February housing market index is estimated to be 83.0.
The dominant influences remain the hawkish Federal Reserve and tensions in Ukraine.
CURRENCY FUTURES
Industrial production in the euro area increased 1.2% from a month earlier in December of 2021, which is well above market expectations of 0.3% growth.
The British pound is higher on news that the annual inflation rate in the U.K. edged higher to 5.5% in January of 2022, which is the highest since March 1992, and above market forecasts of 5.4%.
The Canadian dollar is higher on news that Canada’s headline inflation rate accelerated to 5.1% in January of 2022, which is significantly above market expectations of 4.8%. This was the steepest inflation rate since September of 1991.
Interest rate differential expectations suggest the long term trend for the Japanese yen is lower.
INTEREST RATE MARKET FUTURES
Neel Kashkari of the Federal Reserve will speak at 10:00.
The Treasury will auction 20-year bonds.
The minutes from the recent Federal Open Market Committee meeting will be released at 1:00.
Many market participants expect the Federal Open Market Committee will increase its fed funds rate seven times this year with the first hike likely at the March 16 meeting, or possibly earlier.
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