Written Commentary
The Ghost in the Machine Q1 2024
March 19, 2024
CURRENCY FUTURES
The euro currency is higher despite news that European banks cut lending to businesses last month. The banks cut their lending to euro zone businesses by 3 billion euros in February, equivalent to $3.23 billion, while the increase in lending compared with a year ago slowed to 4.9% from 5.3% in January, according to data released by the European Central Bank. In addition, there was a slowdown in lending to households.
The British pound advanced after Bank of England Governor Andrew Bailey said further monetary tightening would be required if signs of persistent inflationary pressure became evident.
Retail sales in Australia increased 0.2% month-to-month in February 2023, beating market estimates of a 0.1% increase but slowing from a marginally revised 1.8% gain in the prior month.
STOCK INDEX FUTURES
Stock index futures are mixed.
Recent gains are linked to a better tone to the global banking sector.
The 9:00 central time March consumer confidence index is predicted to be 101.0. In February the index was 102.9.
The 9:00 March Richmond Federal Reserve manufacturing index is predicted to be -8.0.
At 9:00 Michael Barr, Vice Chair for Supervision of the Board of Governors of the Federal Reserve will deliver his prepared remarks before the House Financial Services Committee, which were released a day in advance.
Futures have held up well considering recent strains in the international financial system.
INTEREST RATE MARKET FUTURES
Futures are mixed.
However, underlying support remains due to the belief that central banks will not be able to keep raising interest rates for long.
The Treasury will auction five-year notes.
The technicals and fundamentals for futures have become more supportive since March 3.
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