US Dollar Higher For The Second Day

by Alan Bush

STOCK INDEX FUTURES

Stock index futures traded lower yesterday with follow-through today after cautious comments about the global economy from U.S. Federal Reserve Chairman Jerome Powell.

Mr. Powell said further stimulus could be needed to support the economy’s recovery.

Jobless claims in the week ended May 9 were 2.981 million when 2.700 million were expected.

Some recovery is likely for stock index futures from the current lower levels.

CURRENCY FUTURES

The U.S. dollar is higher for a second day after President Trump said he would prefer a stronger dollar to accompany the economic recovery.

The British pound is lower after Bank of England Governor Andrew Bailey said Britain’s economy may suffer long-term damage.

The Japanese yen is lower despite a report that Bank of Japan Governor Haruhiko Kuroda said he saw no immediate need to deepen the bank’s negative interest rate policy. Mr. Kuroda said while the bank’s current short-term interest rate target is minus 0.1%, there is still “substantial room” to cut further. However, it was not necessary to do so at this point.

The Australian dollar is lower after it was recently reported that Australia’s economy lost 594,300 jobs in April, which is worse than the 575,000 expected. Full time employment was down by 222,500 with 373,800 part time jobs lost. 

INTEREST RATE MARKET FUTURES

Some flight to quality buying is coming into the long end of the curve in light of lower stock index futures.

Federal Reserve speakers today are Neel Kashkari at 12:00, Raphael Bostic at 2:00 and Robert Kaplan at 5:00.

Supply remains an issue with the Treasury to auction 20-year bonds next week.

The 30-year Treasury bond futures remain in a broadly based congestion pattern as the main fundamental influences affecting the long end of the curve are offsetting.

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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.

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