Written Commentary
STOCK INDEX FUTURES
S&P 500 and NASDAQ futures advanced to new record highs yesterday.
The 9:00 central time April leading indicators report is expected to show a 0.3% decline.
The fundamentals and technicals remain supportive.
CURRENCY FUTURES
The U.S. dollar index is higher.
Industrial production in Switzerland declined 3.1% year-on-year in the first quarter of 2024 from an upwardly revised 0.5% fall in the previous quarter. This marked the second consecutive quarter of declining industrial activity.
The April consumer price index in the euro zone increased 0.6% on the month as expected.
Schnabel of the European Central Bank said depending on incoming data, a rate cut in June may be appropriate, but the path beyond June is much more uncertain.
The Japanese yen weakened toward 156 per U.S. dollar after the Bank of Japan left its bond buying amounts the same as the previous operation, deciding against a reduction of debt buying.
INTEREST RATE MARKET FUTURES
Yesterday the 30-year U.S. Treasury bond futures advanced to the highest level since April 2. However, prices are a little lower today.
Federal Reserve speakers today are Christopher Waller at 9:15 and Mary Daly at 11:15.
Federal Reserve Chair Jay Powell will speak Sunday afternoon at 2:30.
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 for futures, especially at the long end of the yield curve.
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