Fed Chair Powell in Panel Discussion

STOCK INDEX FUTURES

Stock index futures are higher due to increasing optimism that a deal on the debt ceiling could be reached this weekend or next week.

Federal Reserve Chair Jerome Powell will participate in a panel discussion in Washington, D.C. at 10:00 central time.

Stock index futures have performed well in 2023 despite a variety of bearish news and an ongoing hawkish Federal Reserve.

Federal Reserve Building

CURRENCY FUTURES

Hawkish comments from Federal Reserve officials have supported the U.S. dollar in the last two weeks, although not today.

The annual producer inflation in Germany eased for the seventh consecutive month to a 25-month low of 4.1% in April 2023 when analysts were expecting  4.0%.

U.K. consumer confidence increased to the highest level since early 2022. The overall index improved to -27 in May from -30 in April.

The annual inflation rate in Japan unexpectedly accelerated to 3.5% in April defying forecasts for a further slowdown to 2.5%. The core inflation rate increased to a three-month high of 3.4% and exceeded the Bank of Japan’s 2.0% target for the thirteenth consecutive month.

Retail sales in Canada decline by 1.4% in March as expected.

INTEREST RATE MARKET FUTURES

Futures are lower due to ongoing hawkish comments from Federal Reserve officials.

Financial futures markets are predicting there is a 60% probability that the Federal Open Market Committee will keep its fed funds rate unchanged at its June 14 policy meeting, and there is a 40% chance of a 25 basis point increase.

A hawkish Fed is dominating the fundamentals in the near term.

 

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