Financials Lower Awaiting FOMC Minutes Today
STOCK INDEX FUTURES
U.S. stock index futures are lower, as investors await the minutes of the Federal Reserve’s latest monetary policy meeting.
Mortgage applications increased by 1.2% in the week ending May 14, according to the Mortgage Bankers Association. In addition, applications to refinance a home loan increased 4.0% on a weekly basis, while those to purchase a home dropped 4.1%.
A congestion pattern is forming now that most likely will be followed by an upside breakout.
The U.S. dollar index is higher today after falling to a three-month low yesterday. Recent weakness can be partially explained by Federal Reserve officials persistently downplaying inflation risks, saying they are transitory and borrowing costs will remain low for some time.
The British pound is lower despite news that the annual inflation rate in the U.K. increased to 1.5% in April from 0.7% in March and compared to market forecasts of 1.4%. This is the highest reading since March of 2020.
INTEREST RATE MARKET FUTURES
Federal Reserve speakers today are James Bullard at 9:00 central time and Randal Quarles at 9:00.
The Treasury will auction 20-year bonds.
At 1:00 the Federal Open Market Committee will release the minutes from its April 28 policy meeting. At that meeting officials voted unanimously to maintain the central bank’s policies aimed at holding down borrowing costs.
The FOMC minutes of the previous meeting are reported three weeks after the meeting.
In my minority view, I am seeing indications that the global economy will continue to improve, but growth may not be as strong as many analysts are predicting.
More analysts are beginning to believe that the Federal Reserve may be correct in its thinking that inflationary pressures are transitory.
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