Written Commentary
STOCK INDEX FUTURES
Stock index futures were lower in the overnight trade following several weaker than expected corporate earnings reports.
However, futures recovered when the larger than expected jobless claims report was released.
Jobless claims in the week ended May 4 were 231,000 when 212,000 were anticipated.
The fundamentals and technicals are becoming more bullish.
CURRENCY FUTURES
The U.S. dollar index was higher in the overnight trade after comments yesterday from several Federal Reserve officials suggested interest rates will stay elevated for longer. However, some pressure on the greenback developed when the larger than anticipated jobless claims number was released.
The Bank of England left its key interest rate unchanged at 5.25%, as largely expected, but more Monetary Policy Committee members supported a rate cut than expected.
Two of the nine members of its MPC, including the deputy governor, voted to lower the key rate to 5.0%. Bank of England Governor Andrew Bailey in his press conference said, “We are not yet at a point to cut interest rates.”
INTEREST RATE MARKET FUTURES
Futures were steady to lower in the overnight trade but quickly firmed when the larger than expected jobless claims report was released.
The Treasury will auction 30-year bonds today.
Financial futures markets are predicting there is a 69% 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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