Written Commentary
STOCK INDEX FUTURES
U.S. stock index futures are higher after the S&P 500 had its best quarter in over 20 years.
The Automatic Data Processing, Inc. employment change report showed an increase of 2,369,000 when a gain of 3,500,000 was expected.
The 8:45 central time June PMI manufacturing index is anticipated to be 49.6.
There are two 9:00 reports. The June Institute for Supply Management manufacturing index is estimated to be 49 and the May construction spending report is predicted to show a 0.8% increase.
Stock index futures will be supported by the belief that any slowdown in the global economic recovery will be met with additional accommodation from the world’s central banks, along with more fiscal stimulus.
CURRENCY FUTURES
Yesterday the U.S. dollar advanced to its highest level since June 3, as interest rate differential expectations have recently turned slightly more favorable to the U.S. dollar.
The euro currency is lower despite news that the number of people out of work in Germany increased much less than expected in June. The Labour Office said an additional 69,000 people were out of work in seasonally adjusted terms. Economists had forecast an increase of 120,000.
The euro zone June manufacturing PMI was 47.4 when 46.9 was predicted.
The U.K. manufacturing sector showed signs of stabilizing in June. The seasonally adjusted IHS Markit/CIPS Purchasing Managers’ Index improved to 50.1 in June, which is up from 40.7 in May and unchanged from the flash estimate.
INTEREST RATE MARKET FUTURES
Federal Reserve speakers today are Charles Evans at 9:00 and Mary Daly at 12:00.
The minutes of the most recent Federal Open Market Committee meeting will be released at 1:00.
According to financial futures markets there is a 96.7% probability that the Federal Open Market Committee will leave its fed funds rate unchanged at zero to 25 basis points at its July 29 policy meeting.
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