by Alan Bush, Senior Financial Economist
STOCK INDEX FUTURES
U.S. stock index futures are higher despite rising tensions between Washington and Beijing.
S&P 500 futures are trading at the highest levels since March 9 after June S&P 500 futures advanced above a double top on the weekly chart and a triple top on the daily chart.
The April Chicago Federal Reserve national activity index was negative 16.74, which compares to the previous month’s figure of a revised negative 4.97.
The 9:00 central time May consumer confidence index is anticipated to be 88.3 and the 9:00 April new home sales report is estimated to show 495,000.
The 9:30 May Dallas Federal Reserve manufacturing general activity index is predicted to be negative 57.
The technical picture continues to improve for stock index futures.
The U.S. dollar is sharply lower but remains within a two-month trading range.
The British pound is higher despite a report from the Confederation of British Industry, which showed retail sales volumes remained depressed in the year to May. However, the pace of decline slowed a little compared with April. The report showed volumes are expected to fall at a slightly slower rate next month.
Higher crude oil prices supported the Canadian dollar and the Australian dollar.
INTEREST RATE FUTURES
In a risk on move, futures are lower across the board with most of the selling at the long end of the curve.
Neel Kashkari of the Federal Reserve will speak at 12:00.
The Treasury will auction two-year notes.
The next Federal Open Market Committee meeting is scheduled for June 9-10. Currently there is a 98.6% probability that the FOMC will leave its fed funds rate unchanged at zero to 25 basis points.
In the weeks ahead it is likely that the yield curve will continue to steepen.
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