Written Commentary
CURRENCY FUTURES
The U.S. dollar index is higher due to hawkish rhetoric from Federal Reserve officials. However, the debt ceiling issue should limit gains for the greenback.
The March U.K gross domestic product contracted 0.3% month-on-month, which is below market expectations for a flat growth.
Longer term, interest rate differentials suggest lower prices for the U.S. dollar and higher prices for the euro currency.
STOCK INDEX FUTURES
Stock index futures are higher.
Import prices in April increased 0.4% when up 0.3% was expected and export prices increased 0.2% as anticipated.
The 9:00 central time May consumer sentiment index is estimated to be 63.0.
Stock index futures have performed very well recently despite more hawkish comments from Federal Reserve officials.
INTEREST RATE MARKET FUTURES
Federal Reserve Governor Michelle Bowman, in remarks prepared for delivery today at a banking conference in Germany, said she was not confident the central bank was making enough progress slowing down economic activity and inflation. She said the central bank should be prepared to continue increasing interest rates because inflation is still too high, and the labor market remains too tight.
Her comments were somewhat contrary to recent remarks from Federal Reserve Chair Jerome Powell when last week he suggested officials could consider a pause at the central bank’s June 14 meeting.
Other Federal Reserve speakers today are Mary Daly at 1:20 and James Bullard at 6:45 this evening.
The Federal Open Market Committee will probably keep its fed funds rate unchanged at its June 14 policy meeting.
The technicals and fundamentals remain supportive to futures.
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