Written Commentary
The Ghost in the Machine Q1 2024
March 19, 2024
More Accommodation Likely From Central Banks
- May 13, 2020
- Alan Bush
- Follow us on Twitter @ADMISI_Ltd
by Alan Bush
STOCK INDEX FUTURES
Stock index futures traded higher in the overnight trade as investors awaited Federal Reserve Chairman Jerome Powell’s comments about the outlook for monetary policy.
Mr. Powell’s webcam speech began at 8:00 central time and contained no major surprises.
The mortgage applications index in the week ended May 8 increased 0.3%.
The Atlanta Fed’s business inflation expectations survey for May will be released at 9:00. Last month the survey showed inflation expectations at 1.4%.
In recent weeks stock index futures have overperformed the news.
CURRENCY FUTURES
The U.S. dollar is lower but remains in a trading range. Prospects of more accommodation from the Federal Reserve have undermined the greenback in recent days.
The euro currency is higher in spite of news that euro zone factory output fell at the fastest rate on record in March. The European Union’s statistics agency said industrial output in the 19 countries that share the euro was 11.3% lower than in February and was down 12.9% from the same month last year.
German Chancellor Merkel said she will respect the German Constitutional Court’s ruling on the European Central Bank’s asset purchase program.
The British pound is higher even though a report showed U.K. retail sales fell 19.1% in April compared with April last year.
In addition, the U.K. monthly gross domestic product dropped by 5.8% in March, although this was better than the anticipated 8.0% decline.
INTEREST RATE MARKET FUTURES
The Treasury will auction 30-year bonds today.
The Treasury is auctioning $96 billion across the 3-year, 10-year, and the 30-year maturities this week. The Treasury will auction 20-year bonds next week.
Futures are higher across the board in anticipation of more accommodation from the Federal Reserve.
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Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.
