Written Commentary
STOCK INDEX FUTURES
U.S. stock index futures are higher.
Personal income in April declined 13.1% when down 14.0% was expected.
The 8:45 central time May Chicago PMI is anticipated to be 70.0 and the 9:00 May consumer sentiment index is predicated to be 83.0.
A congestion pattern is forming now that most likely will be followed by an upside breakout.
CURRENCY FUTURES
The U.S. dollar index is higher lifting from 4-month lows that were touched earlier in the week.
In the longer term, pressure on the U.S. dollar is likely as the U.S. budget deficit grows and the Fed’s balance sheet expands. The next support on the daily chart is the early January low of 89.155.
The euro currency is lower despite news that euro zone business and household confidence increased again sharply in May. The European Commission said its economic sentiment indicator, which is an aggregate measure of business and consumer confidence, increased to 114.5 in May from 110.5 in April. The indicator beat the consensus forecast of 112.8.
The Japanese yen is lower on news that Japan’s jobless rate increased to 2.8% in April from an 11-month low of 2.6% a month earlier and above the consensus of 2.7%.
INTEREST RATE MARKET FUTURES
Futures are mixed.
Federal Reserve Bank of Dallas President Robert Kaplan yesterday said it is time for Fed officials to start discussing how to reduce their $120 billion a month in Treasury and mortgage-bond securities buying. He said, “I think it would be wise sooner rather than later to begin gently taking our foot off the accelerator.”
In my minority view, I am seeing indications that the global economy will continue to improve, but growth may not be as strong as many analysts are predicting.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.
