Written Commentary
STOCK INDEX FUTURES
Futures are higher after softer employment data on Friday strengthened confidence that the Federal Reserve may cut interest rates sooner.
There are no major economic reports scheduled for today.
The fundamentals and technicals are becoming more bullish.
CURRENCY FUTURES
The U.S. dollar index is lower.
Interest rate differentials have turned neutral for the U.S. dollar.
European Central Bank Governing Council member Gediminas Simkus said he sees interest rates being reduced three times in 2024, starting with a cut in June.
HCOB’s composite Purchasing Managers’ Index for the zone euro zone, improved to 51.7 in April from March’s 50.3, and surpassing a preliminary estimate of 51.4.
March euro zone producer prices declined 0.4% on the month when down 0.5% was expected.
The April euro zone services PMI was 53.3 when 52.9 was expected.
The Reserve Bank of Australia will meet on May 6 and 7. Economists expect the central bank will leave the cash rate unchanged at 4.35%.
INTEREST RATE MARKET FUTURES
Futures are mixed to higher.
Federal Reserve speakers today are Thomas Barkin at 11:50 and John Williams at 12:00 central time.
Financial futures markets are predicting there is a 68% probability that the Federal Open Market Committee will lower its fed funds rate by 25 basis points at its September 18 meeting.
The fundamentals and technicals have improved.
Futures at the long end of the curve are likely to gain on futures at the short end of the curve.
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