Written Commentary
The Ghost in the Machine Q1 2024
March 19, 2024
CURRENCY FUTURES
The U.S. dollar index fell for a sixth consecutive session and to its lowest level since early February, and the euro currency strengthened to the highest level in seven weeks.
The Bank of England increased its bank rate by 25 basis points to 4.25% from 4.0% in a widely anticipated move.
The Swiss National Bank hiked its key interest rate by 50 basis points to 1.5%, as predicted by economists.
The Reuters Tankan sentiment index for manufacturers in Japan was at -3 in March 2023, improving from February’s reading of -5 but remaining negative for the third consecutive month.
STOCK INDEX FUTURES
Stock index futures initially rallied yesterday when the Federal Open Market Committee announced a 25 basis point increase in its fed funds rate, accompanied by a neutral to slightly dovish statement. However, prices declined later after Treasury Secretary Yellen’s comments on the banking situation.
Jobless claims in the week ended March 18 were 191,000 when 195,000 were expected.
The February Chicago Federal Reserve national activity index was -0.19 when 0.18 was anticipated.
The 9:00 central time February new home sales report is predicted to show 645,000.
Futures have held up well considering recent strains in the international financial system.
INTEREST RATE MARKET FUTURES
The Federal Open Market Committee is caught between the influences of inflation and bank stability concerns.
The technicals and fundamentals for the June 30-year Treasury bond futures have become more supportive in the past two weeks.
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