Futures Supported With Jobless Claims Report
STOCK INDEX FUTURES
U.S. stock index futures are higher as investors await the next steps on a new fiscal stimulus package.
There was support for futures when the jobless claims report was released. Jobless claims in the week ended February 4 were 779,000 when 835,000 were expected.
The 9:00 central time December factory orders report is anticipated to show an increase of 0.7%.
The euro currency is lower despite news that euro zone retail sales increased more than expected in December. The European Union’s statistics agency said the volume of retail sales was 2.0% higher than in November. Economists anticipated a 0.5% gain.
The Bank of England, at its monetary policy meeting today, voted unanimously to keep its benchmark interest rate on hold at a record low of 0.1% and left its bond-buying program unchanged, as expected. The central bank indicated that it stands ready to adjust monetary policy if needed.
A PMI survey showed Britain’s construction sector declined unexpectedly into contraction in January.
INTEREST RATE MARKET FUTURES
Two Federal Reserve officials yesterday said there will be no imminent pullback in central bank support for the U.S. economy.
Federal Reserve Bank of Chicago President Charles Evans said there is the potential for a temporary rise in inflation over the next few months, but “It will be critical for monetary policy makers to look through temporary price increases and not even think about thinking about adjusting policy.” Federal Reserve Bank of St. Louis leader James Bullard said, “We’re in a good place with monetary policy,” and the Fed should not consider pulling back on its stimulus.
Federal Reserve speakers today are Robert Kaplan at 12:00 and Mary Daly at 1:00.
In light of the Federal Reserve pledging not to hike its fed funds rate until possibly 2023, futures at the short end of the curve are likely to hold steady.
Major central banks this year are likely to either keep policies on hold or add more accommodation. While the Bank of England kept policies unchanged at today’s meeting, earlier this week the Reserve Bank of Australia announced an unexpected extension of its government bond-buying program when the current one expires in April. RBA policy makers said they would extend their bond-buying program by another A$100 billion.
The next Federal Open Market Committee meeting is scheduled for March 17.
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