Written Commentary
STOCK INDEX FUTURES
The April Empire State manufacturing index was -8.1 when -10.0 was expected.
Import prices in March declined 0.1% when unchanged was anticipated, and export prices in March were unchanged when a 0.1% increase was estimated.
Stock index futures are lower this morning but are likely to recover and trade higher on the day.
An accommodative Federal Reserve monetary policy remains an underlying long term supportive influence.
CURRENCY FUTURES
The March U.S. dollar index is a little higher but continues to hover near the lowest level in three years as concerns over the U.S. economic outlook and policy direction continued to weigh on sentiment.
The ZEW Indicator of Economic Sentiment for Germany fell to -14 in April 2025, which is the lowest level since July 2023, and is much worse than forecasts of 9.5.
Euro zone industrial production increased 1.1% month-over-month in February 2025, accelerating from a downwardly revised 0.6% advance in January and easily surpassing market expectations of a 0.3% gain.
U.K. wage growth held steady at 5.6%, which reinforces concerns that wage inflation could delay any near-term interest rate cuts by the Bank of England. The unemployment rate remained unchanged at 4.4%.
INTEREST RATE MARKET FUTURES
Futures are mostly lower.
Atlanta Federal Reserve Bank President Raphael Bostic suggested the central bank should stay on hold until there is more clarity, while Federal Reserve Governor Christopher Waller said on Monday that interest rates may need to be cut soon.
Federal Reserve speakers today are Thomas Barkin at 10:35 central time and Lisa Cook at 6:10 PM.
The Federal Open Market Committee is predicted to lower its key interest rate by 25 basis points three times in 2025 with the first reduction likely at the June meeting.
The interest rate market futures have recently underperformed the news.
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