Written Commentary
STOCK INDEX FUTURES
The April producer price index increased 0.5% as expected, and the producer price index, excluding food and energy, was up 0.4% when a gain of 0.6% was anticipated.
Jobless claims in the week ended May 7 were 203,000 when 190,000 were expected.
Some of the major downside chart objectives have been hit in the S&P 500 futures using the midway congestion pattern measured move technique.
CURRENCY FUTURES
The U.S. dollar index advanced to a new 20-year high.
Interest rate differential expectations suggest higher prices are likely for the greenback.
The British economy expanded 0.8% on the quarter in Q1 slowing from a 1.3% expansion in Q4 and below market forecasts of 1.0%.
Flight to quality buying is coming into the Japanese yen.
Longer term, interest rate differential expectations remain bearish for the Japanese yen and lower prices are likely.
INTEREST RATE MARKET FUTURES
Now is a good time to cover short positions in the interest rate market futures, since there are indications that the rate of inflation is peaking.
Mary Daly of the Federal Reserve will speak at 1:00.
The Treasury will auction 30-year bonds today.
Financial futures markets are predicting there is a 94.5% probability that the Federal Open Market Committee will hike its fed funds rate by 50 basis points and a 5.5% probability that the rate will increase by 75 basis points at the June 15 policy meeting.
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