Written Commentary
STOCK INDEX FUTURES
S&P 500 futures are higher for a fourth consecutive day with the June S&P 500 futures hitting the highest level since March 6.
Jobless claims in the week ended May 23 were 2,123,000 when 2,100,000 were expected.
The first quarter U.S. gross domestic product was down 5.0% when a decline of 4.8% was anticipated.
April durable goods orders declined 17.2% when down 18.2% was predicted.
The 9:00 April pending home sales index is expected to be down 15%.
The 10:00 May Kansas City Federal Reserve manufacturing index is estimated to be negative 22.
The technical picture continues to improve for stock index futures.
CURRENCY FUTURES
The euro currency is higher after the European Commission’s economic sentiment indicator edged up to 67.5 in May from its record low 63.8 in April. The gauge was at 102.5 in January.
Germany’s annual consumer price index fell to 0.6% in May, as expected.
The British pound is higher in spite of dovish commentary from Bank of England policymaker Michael Saunders.
The Australian dollar is higher after Reserve Bank of Australia Governor Philip Lowe told a parliamentary committee that he is currently less downbeat on the outlook for the economy.
INTEREST RATE MARKET FUTURES
In keeping with the global trend of central banks becoming more accommodative, the Bank of Korea lowered its benchmark interest rate by 25 basis points to 0.50%, a record low, after a surprise 50 basis point cut in mid-March.
Federal Reserve speakers today are John Williams at 10:00 and Patrick Harker at 2:00.
Federal Reserve Chairman Jay Powell will speak tomorrow at 10:00.
The Treasury will auction seven-year notes today.
The next Federal Open Market Committee meeting is scheduled for June 9-10. According to financial futures markets there is nearly a 100% probability that the FOMC will leave its fed funds rate unchanged at zero to 25 basis points.
The yield curve is steepening today and, in the weeks ahead it is likely that the yield curve will continue to steepen.
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