Written Commentary
The Ghost in the Machine Q1 2024
March 19, 2024
Technicals Remain Supportive for Indices
- January 26, 2023
- Alan Bush
- Follow us on Twitter @ADMISI_Ltd
STOCK INDEX FUTURES
Stock index futures are higher.
Gross domestic product in the fourth quarter increased 2.9% when up 2.7% was expected.
Durable goods orders in December increased 5.6% when a gain of 2.8% was anticipated.
Jobless claims in the week ended January 21 were 186,000 when 205,000 were predicted.
The December Chicago national activity index was-0.49 when -0.51 was estimated.
Wholesale inventories in December increased 0.1% when up 0.5% was expected.
The 9:00 central time December new home sales report is anticipated to be 614,000.
The technical aspects are supportive on balance.
CURRENCY FUTURES
The U.S. dollar index is higher, as futures remain in a trading range.
Interest rate differentials are neutral for the U.S. dollar.
The Confederation of British Industry’s distributive trades survey’s retail sales balance in the U.K. fell 34 points from a month earlier to -23 in January 2023, which is worse than market expectations of -5, according to the CBI’s latest quarterly Distributive Trades Survey. This was also the weakest report since last April.
Traders are positioning for big monetary policy events next week, with the Federal Reserve decision due on Wednesday and both the Bank of England and the European Central Bank on Thursday. Both the BoE and the ECB are set to hike their key interest rates by 50 basis points.
INTEREST RATE MARKET FUTURES
The Treasury will auction 7-year notes today.
According to financial futures markets, currently there is a 99.0% of probability that the Federal Open Market Committee will increase its fed funds rate by 25 basis points and a 1.0% probability of a 50 basis point hike at the February 1 policy meeting.
The long term outlook for futures is higher.
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