Written Commentary
STOCK INDEX FUTURES
The March Empire State manufacturing index was -20.9 when -8.0 was expected.
Import prices in February increased 0.3% when up 0.2% was anticipated, and export prices advanced 0.8% when a gain of 0.1% was forecast.
Industrial production in February was up 0.1% when unchanged was estimated and capacity utilization was 78.3% when 78.4% was expected.
The 9:00 central time March consumer sentiment index is anticipated to be 77.3.
Stock index futures have traded higher this year despite a Federal Reserve that is slow to pivot to accommodation.
The fundamentals are mostly bullish, while the technicals remain supportive to stock index futures.
CURRENCY FUTURES
The U.S. dollar index is steady.
European Central Bank policymaker Olli Rehn said the central bank started discussions about when it is appropriate to start cutting interest rates.
The Germany’s economy ministry said in its monthly report a tangible recovery is not yet in sight despite positive trends in industrial production, construction and foreign trade at the start of 2024.
U.K. inflation expectations fell to the lowest level since the summer of 2021. Households in February expected prices to increase 3.0% over the next 12 months, which is down from 3.3% in November, according to the BOE’s quarterly Inflation Attitudes Survey.
Speculation is increasing regarding an exit from the BOJ’s negative short-term interest rate policy. A recent poll showed the BOJ may exit negative interest rates at its April meeting, but the March 19 meeting cannot be ruled out.
Canadian housing starts in February were 253,500 compared to 230,000 that were expected, and 223,600 previously.
INTEREST RATE MARKET FUTURES
Financial futures markets are predicting there is a 1.0% probability that the Federal Open Market Committee will lower its fed funds rate by 25 basis points at the March 20 meeting, and there is a 99% chance that the Fed will keep rates unchanged.
Analysts are becoming more confident that any interest rate cuts will probably occur later in the year, especially after recent consumer price index and producer price index reports exceeded expectations.
The fundamentals and technicals remain bearish on balance for futures at the short end of the yield curve.
Interested in more futures markets? Explore our Market Dashboards here.
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2021 ADM Investor Services International Limited.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.
