Written Commentary
STOCK INDEX FUTURES
Stock index futures are higher across the board after President Donald Trump confirmed he has no plans to remove Federal Reserve Chair Jerome Powell. In addition, U.S. Treasury Secretary Scott Bessent suggested there is a potential de-escalation in the US-China trade war.
The 8:45 central time April Manufacturing PMI is expected to be 49.4, and the PMI services index is anticipated to be 52.5.
The 9:00 March new home sales report is estimated to be 682,000.
The Federal Reserve will release its Beige Book on the economy at 1:00. This book is produced approximately two weeks before the monetary policy meetings of the Federal Open Market Committee. On each occasion a different Federal Reserve district bank compiles anecdotal evidence on economic conditions from each of the 12 Federal Reserve districts.
Yesterday the June S&P 500 futures advanced above a five-day downtrend line, and there has been follow through strength today with a gap higher opening.
Anticipated interest rate cuts from the Federal Reserve later this year remain an underlying long term supportive influence.
CURRENCY FUTURES
The June U.S. dollar index Is higher as concerns over the Federal Reserve’s independence eased and increasing hopes for a de-escalation in the trade war. President Trump stated he has no intention of dismissing Federal Reserve Chair Jerome Powell. He also signaled a softer stance toward China.
Despite the recent rebound, the greenback is approximately 9% lower year-to-date and has lost much of its safe-haven appeal in recent weeks in light of ongoing trade tensions.
The HCOB euro zone Composite PMI fell to 50.1 in April of 2025 from 50.9 in the previous month, which is slightly below market expectations of 50.3.
The HCOB Flash Germany Composite PMI declined to 49.7 in April 2025 from 51.3 in March and was under forecasts of 50.4. The reading pointed to a surprise contraction in private sector activity, which was the first in four months.
Traders are increasingly betting that the Reserve Bank of Australia will lower interest rates at its May meeting. While a 25 basis-point reduction is widely anticipated, some analysts are pricing in a more aggressive 50 basis-point cut.
INTEREST RATE MARKET FUTURES
Futures are lower at the front of the yield curve and are higher at the long end of the yield curve.
The yield on the 10-year U.S. Treasury note declined by approximately 5 basis points to 4.35% on Wednesday.
The U.S. Treasury will auction five-year notes today.
Federal Reserve speakers today are Austan Goolsbee at 8:00, Christopher Waller at 8:35, Alberto Musalem at 1:35 and Beth Hammack at 5:30.
The Federal Open Market Committee will probably keep its fed funds rate unchanged at 4.25% – 4.50% at its May 7 policy meeting.
However, the Federal Open Market Committee is likely to lower its fed funds rate by 25 basis points three or four times this year with the first reduction potentially coming at the June 18 policy meeting.
Interested in more futures markets? Explore our Market Dashboards here.
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.
