The Dollar Gives Back Gains

CURRENCY FUTURES

The U.S. dollar index gave back almost all of yesterday’s gains. There was support for the greenback last week due to a series of hawkish comments from Federal Reserve officials.

Investor morale in the euro zone improved in April after a surprise decline in March. The current conditions increased to the highest level in more than a year.

There is underlying support for the euro currency due to expectations the European Central Bank will keep raising interest rates in the coming months to combat inflation.

Australian consumer sentiment improved more than expected in April. The Westpac-Melbourne Institute consumer sentiment index jumped 9.4% to 85.8 in early April, which is more than expectations for an increase of 1.5%.

STOCK INDEX FUTURES

Stock index futures are mixed, as the focus shifts to inflation data and earnings.

The  National Federation of Independent Business (NFIB) small business optimism index edged lower to a three-month low of 90.1 in March of 2023 from 90.9 in February. This marks the 15th  consecutive month the index was below its 49-year average of 98, as small business owners are worried about future economic conditions.

This is a big week for inflation reports. The March consumer price index will be released tomorrow and is anticipated to show a 0.3% increase. Thursday’s March producer price index is  predicted to be unchanged.

Stock index futures have performed very well considering recent strains in the international financial system and recent hawkish comments from Federal Reserve officials.

INTEREST RATE MARKET FUTURES

Futures are mixed.

The Treasury will auction three-year notes.

Underlying support for futures remains due to the belief that central banks will not be able to keep raising interest rates much longer.

The technicals and fundamentals for futures turned supportive in early March.

 

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