Written Commentary
STOCK INDEX FUTURES
Stock index futures are lower.
The second estimate of the fourth quarter gross domestic product increased 3.2% when up 3.3% was expected. Personal consumption expenditures were up 3.0% when a gain of 2.8% was anticipated.
Mortgage applications in the U.S. declined by 5.6% on the week ending February 23, extending the year-high 10.6% plunge in the previous period to the lowest level since November 2023.
The fundamentals are mostly bullish, while and technicals remain supportive to stock index futures.
CURRENCY FUTURES
The U.S. dollar index is higher.
Interest rate differentials remain supportive to the greenback longer term.
The euro currency is lower after a report showed confidence in the euro zone economy unexpectedly worsened in February.
The euro zone sentiment indicator fell to 95.4 when a slight uptick was expected by economists.
Australia’s monthly consumer price index increased at an annual pace of 3.4% in January, which is unchanged from December and under market estimates of 3.6%. Core inflation advanced an annual 3.8%, which is down from 4.0% in December.
INTEREST RATE MARKET FUTURES
Federal Reserve Governor Michelle Bowman repeated her expectation that inflation will continue to decline further with interest rates holding at their current level, but said it is too soon to begin interest rate cuts.
Federal Reserve speakers today are Rafael Bostic at 11:00, Susan Collins at 11:15 and John Williams at 11:45.
Financial futures markets are predicting there is a 2.0% 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 98% chance that the Fed will keep rates unchanged.
The fundamentals and technicals remain bearish on balance for futures.
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