Written Commentary
by Alan Bush, Senior Financial Economist
STOCK INDEX FUTURES
U.S. stock index futures are higher, helped by strong corporate earnings.
In the June S&P 500 futures there is a top double top at the 2965.00 – 2976.25 area.
The technical picture continues to improve for stock index futures.
CURRENCY FUTURES
The U.S. dollar is lower for a fourth day on the belief that the Federal Reserve could do more to stimulate the U.S. economy.
The euro zone April consumer price index was up 0.3% on the month, as expected and up 0.3% on the year when an increase of 0.4% on the year was anticipated.
The U.K. inflation rate sank in April to its lowest level since August 2016, falling to 0.8% from 1.5% a year earlier. This now means that the inflation figure is outside the Bank of England’s mandate and increases the prospects for more Bank of England stimulus next month.
The Japanese yen is higher after a report showed Japan’s March core machinery orders fell 0.4% on the month when a decline of 7.0% was predicted.
The Australian dollar is higher even though a report showed preliminary Australian retail sales fell 17.9% on the month in April, dropping sharply from growth of 8.5% in March.
INTEREST RATE MARKET FUTURES
In testimony to Congress yesterday Federal Reserve Chairman Jerome Powell and Treasury Secretary Steven Mnuchin said U.S. officials are aiming to have lending programs planned for smaller businesses and municipalities up and running by the end of the month.
Federal Reserve speakers today are Raphael Bostic at 9:00 and James Bullard at 11:00.
The Treasury will auction 20-year bonds.
At 1:00 the Federal Reserve will release the minutes from its April 28 and 29 Federal Open Market Committee meeting when officials promised to use a full range of tools to support the U.S. economy. The Fed issues minutes of its previous meetings with a lag of three weeks after the meeting.
The thirty-year Treasury bond futures are in a broadly based congestion pattern, as the main fundamental influences are offsetting.
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