Written Commentary
CURRENCY FUTURES
The U.S. dollar index is slightly higher due to increased geopolitical concerns. The greenback will probably remain firm in advance of Powell’s likely hawkish on balance testimony to Congress.
Interest rate differentials remain supportive to the greenback longer term.
Industrial producer prices in the euro area decreased by 8.6% year-on-year in January 2024, from a revised 10.7% drop in the previous month. An 8.1% decline was estimated.
The euro zone February services PMI was 50.2 when 50.0 was predicted.
STOCK INDEX FUTURES
Stock index futures are lower due to increased geopolitical worries.
The 8:45 central time February PMI composite is expected to be 51.4.
The 9:00 January factory orders report is anticipated to show a 3.0% decline, and the 9:00 February Institute for Supply Management services index is predicted to be 53.0.
Federal Reserve Chairman Jerome Powell will deliver his semiannual testimony to Congress on Wednesday and Thursday at 9:00 central time.
The fundamentals are mostly bullish, while and technicals remain supportive to stock index futures.
INTEREST RATE MARKET FUTURES
Geopolitical worries supported the interest rate market futures.
Financial futures markets are predicting there is a 3.0% probability that the Federal Open Market Committee will lower its fed funds rate by 25 basis points at the March 20 meeting, and there is a 97% chance that the Fed will keep rates unchanged.
Flight to quality buying is likely to only have a temporary bullish impact.
The fundamentals and technicals remain bearish on balance for futures.
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