Written Commentary
STOCK INDEX FUTURES
Stock index futures are higher. Traders are optimistic about potential interest rate cuts by the Federal Reserve this year, especially after yesterday’s higher-than-expected jobless claims data. Comments from Fed officials today will be closely watched, along with next week’s key inflation data.
The 9:00 central time May consumer sentiment index is expected to be 77.0.
The fundamentals and technicals are becoming more bullish.
CURRENCY FUTURES
The U.S. dollar index is higher.
Member of the European Central Banks’s Executive Board, Frank Elderson, said the ECB will “most likely” lower borrowing costs when it meets in June if the outlook for consumer prices are confirmed by fresh quarterly forecasts.
The measure for Japan’s service sector unexpectedly fell to 47.4 in April 2024 from 49.8 in March, missing a market forecast of 50.4. This was the lowest figure since August 2022.
INTEREST RATE MARKET FUTURES
Futures are mixed to lower.
This week’s U.S. Treasury offerings of three-year, 10-year and 30-year debt auctions were all well received.
Federal Reserve speakers today are Michelle Bowman at 8:00, Lorie Logan at 9:00, Neel Kashkari at 9:00, Austan Goolsbee at 11:45 and Michael Barr at 12:30.
Financial futures markets are predicting there is a 67% probability that the Federal Open Market Committee will lower its fed funds rate by 25 basis points at its September 18 meeting.
The fundamentals and technicals have improved for futures, especially at the long end of the yield curve.
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