Written Commentary
STOCK INDEX FUTURES
Stock index futures are sharply higher on limited news.
Thursday of last week a major downside chart objective was hit in the S&P 500 futures using the midway congestion pattern, measured move technique.
Retail sales in April increased 0.9% when up 0.8% was expected.
The 8:15 central time April Industrial production report is anticipated to be up 0.4% and April capacity utilization is estimated to be 78.6%.
There are two 9:00 reports. March business inventories are estimated to be up 1.8% and the May housing market index is predicted to be 75.
The main event today will be Federal Reserve Chairman Powell being interviewed at 1:00.
CURRENCY FUTURES
The euro currency is higher on news that across the 19 countries that use the euro as their currency, gross domestic product grew 0.3% on quarter in the first three months of the year. Economists forecast the economy to grow by 0.2%.
In addition, the euro was supported as traders priced in a more aggressive pace of monetary policy tightening from the European Central Bank after an official raised the prospect of larger rate hikes this year.
European Central Bank Governing Council member Klaas Knot became the first euro zone official to suggest a possible half-point interest rate hike if inflation risks worsen, though he backs a smaller move currently.
The unemployment rate in the U.K. edged down to 3.7% in the first quarter, which is the lowest reading since 1974 and below 3.8% in the previous period and forecasts of 3.8%.
INTEREST RATE MARKET FUTURES
Flight to quality longs are being liquidated in light of sharply higher stock index futures.
Other Federal Reserve speakers today are Patrick Harker at 8:15, Loretta Mester at 1:30 and Charles Evans at 5:45.
Financial futures markets are predicting there is an 85.4% probability that the Federal Open Market Committee will hike its fed funds rate by 50 basis points and a 14.6% probability that the rate will increase by 75 basis points at the June 15 policy meeting.
The interest rate market futures appear to be making a bottom on the charts.
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