Written Commentary
CURRENCY FUTURES
The U.S. dollar is higher today. On Friday the greenback filled a gap but was able to partially bounce back.
The consumer confidence indicator in Switzerland declined to 42.3 in February 2024 from a marginally revised 41.1 in the previous month but remains significantly under the long-term average.
Japan’s October-December gross domestic product was revised higher, narrowly escaping a recession, to show limited growth. Japan’s gross domestic product increased by 0.1% quarter-to-quarter in the fourth quarter of 2023, compared with flash data of a 0.1% decline and a 0.8% contraction in the third quarter. Analysts expected a 0.3% increase.
The Bank of Japan Governor Kazuo Ueda is predicted to increase the short-term interest rate from -10 basis points either at its March 19 policy meeting or at its April 26 meeting in what would be the first rate increase in Japan since 2007.
STOCK INDEX FUTURES
Stock index futures are lower today after on Friday the S&P 500 and NASDAQ futures advanced to new record highs.
There are no major economic reports scheduled for today.
The fundamentals are mostly bullish, while and technicals remain supportive to stock index futures.
INTEREST RATE MARKET FUTURES
The Treasury will auction three-year notes today.
Last week, Fed Chair Powell told Congress the Fed still needs to become more confident that inflation is moving sustainably at 2.0% before cutting the rates, although it is close to it.
Financial futures markets are predicting there is a 3.0% 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 97% chance that the Fed will keep rates unchanged.
While futures at the long end of the curve are technically looking better, the fundamentals and technicals remain bearish on balance for futures at the short end of the yield curve.
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