Written Commentary
INTEREST RATE MARKET FUTURES
Futures were mixed to lower in the overnight trade, and there was mild pressure when the stronger than expected U.S. retail sales report was released.
The U.S. Treasury will auction 20-year bonds.
In addition to Federal Reserve Chair Powell, other Federal Reserve speakers today are Beth Hammack at 11:00 and Jeffrey Schmid at 6:00 PM.
The Federal Open Market Committee is predicted to lower its key interest rate by 25 basis points four times in 2025 with the first reduction likely at the June meeting.
The interest rate market futures have recently underperformed the news.
STOCK INDEX FUTURES
U.S. retail sales in March increased 1.4% when up 1.3% was expected, following a 0.2% gain in February. This was the biggest surge in retail sales since January 2023.
Industrial production in March declined 0.3% when down 0.2% was anticipated, and March capacity utilization was 77.8% when 78.0% was estimated.
The 9:00 central time April housing market index is predicted to be 38, and the 9:00 February business inventories report is expected to show a 0.2% increase.
Federal Reserve Chair Jerome Powell will speak on the economic outlook before the Economic Club of Chicago at 12:30 central time.
Stock index futures are lower this morning but are likely to at least partially recover later today.
An accommodative Federal Reserve monetary policy remains an underlying long term supportive influence.
CURRENCY FUTURES
The March U.S. dollar index is lower and continues to hover near the lowest level in three years as concerns over the U.S. economic outlook and policy direction continued to weigh on sentiment.
There was only a limited recovery in the greenback on news of the stronger than expected U.S. retail sales report.
The euro currency is higher, remaining close to its strongest level since late January 2022.
The latest data from Eurostat showed a dip in euro zone inflation to 2.2% last month, which is a slight decrease from February’s 2.3%.
The annual inflation rate in the U.K. slowed to 2.6% in March 2025 from 2.8% in February and was under the Bank of England’s forecasts of 2.7%.
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