Written Commentary
CURRENCY FUTURES
The U.S. dollar index is a little higher today but recently has ignored hawkish comments from several Federal Reserve officials.
Interest rate differentials are neutral for the U.S. dollar index, and breakouts for the greenback are likely to fail in both directions.
The British pound is lower on news that the U.K. economy shrank more than expected in December. The U.K. gross domestic product declined 0.5% in December, which was more than the 0.3% decline the market was anticipating.
STOCK INDEX FUTURES
The 9:00 central time February consumer sentiment index report is expected to be 65.0.
The influence of the recent employment report is waning as traders begin to focus on next week’s economic reports.
The January consumer price index will be released on Tuesday. January retail sales will be released on Wednesday, and on Thursday we will get the January producer price index.
The technical aspects for stock index futures remain supportive.
INTEREST RATE MARKET FUTURES
Federal Reserve speakers today are Christopher Waller at 11:30 and Patrick Harker at 3:00. In a recent speech Christopher Waller warned of higher interest rates than markets are anticipating.
Most likely the Federal Open Market Committee will increase its fed funds rate by 25 basis points at its March 22 policy meeting.
The long term outlook for futures is higher.
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