Written Commentary
STOCK INDEX FUTURES
Stock index futures advanced when the smaller than expected increase in the March consumer price index was released. The March consumer price index increased 0.1% when a 0.3% increase was expected.
Thursday’s March producer price index is predicted to be unchanged.
The International Monetary Fund on Tuesday released its weakest global growth expectations report for the medium term in over 30 years. The IMF expects global growth of 2.8% this year and 3.0% in 2024, which is slightly below its estimates published in January. The new estimates are a reduction of 0.1 percentage point for both this year and next year.
Stock index futures have performed very well considering recent strains in the international financial system and recent hawkish comments from Federal Reserve officials.
CURRENCY FUTURES
The U.S. dollar index came under pressure when the U.S. consumer price index was released.
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.
Japan’s February core machinery orders declined 4.5% on a month-to-month basis when down 7.8% was predicted.
INTEREST RATE MARKET FUTURES
Futures are higher across the board due to the bullish U.S. consumer price index report.
The Treasury will auction 10-year notes.
Federal Reserve speakers today are Thomas Barkin at 8:10 central time and Mary Daly at 11:00.
The minutes from the March 22 Federal Open Market Committee will be released at 1:00.
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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