Written Commentary
STOCK INDEX FUTURES
Yesterday’s historic advance for stock index futures was due to President Donald Trump’s announcement of a 90-day pause on tariffs for most U.S. trading partners, excluding China, to allow for negotiations.
However, today there was some profit taking in the overnight trade, although there was a partial recovery when the March consumer price index report was released.
The March consumer price index declined 0.1% when a 0.1% increase was expected. The March consumer price increase on an annual basis was up 2.4% when 2.6% was anticipated.
The consumer price index excluding food and energy on a month-to-month basis advanced 0.1% when a gain of 0.3% was estimated, and on an annual basis was up 2.8% when a gain of 3.0% increase was forecast.
Jobless claims in the week ended April 5 were 223,000 when 225,000 were anticipated.
An accommodative Federal Reserve monetary policy remains an underlying supportive influence.
CURRENCY FUTURES
The U.S. dollar index was lower in the overnight trade with follow-through weakness developing when the bearish March consumer price index report was released.
The fundamentals for the greenback remain bearish, and lower prices are likely.
Other traditional safe-haven currencies such as the Japanese yen and the Swiss franc are higher.
The euro currency is higher and is approaching its strongest level since September 2024.
The governor of the Reserve Bank of Australia, Michele Bullock, made it clear that she will not be hasty in making a decision to lower interest rates.
INTEREST RATE MARKET FUTURES
Futures advanced across the board when the decline in the March consumer price index was reported, which compares to the anticipated increase.
The U.S. Treasury will auction 30-year bonds today.
Federal Reserve speakers today are Thomas Barkin at 7:30, Lorie logan at 8:30, Jeffrey Schmid at 9:00, Michelle Bowman at 9:00, Austan Goolsbee at 11:00, Patrick Harker at 11:00 and Susan Collins at 3:00.
The Federal Open Market Committee is predicted to lower its key interest rate by 25 basis points three times in 2025 with the first reduction likely at the June meeting.
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