Written Commentary
CURRENCY FUTURES
The U.S. dollar index is lower.
The euro currency remained near its highest level in over a year as investors anticipate continued commitment from the European Central Bank to increase interest rates in an effort to combat inflation.
Industrial production in Germany declined 3.4% month-over-month in March of 2023, reversing upwardly revised 2.1% growth in February and worse than market predictions of a 1.3% fall.
The British pound remained near its highest level since May 2022, as traders anticipate the Bank of England’s upcoming interest rate decision on Thursday. U.K. policymakers are widely expected to hike interest rates by 25 basis points to 4.5%. Analysts are predicting interest rates will increase further to approximately 4.80% later this year.
The au Jibun Bank Japan Services PMI was revised higher to a record high of 55.4 in April 2023 from a flash reading of 55.0.
Australia’s NAB business confidence index was up 1 point to 0 in April 2023, which is the highest reading since January.
Longer term, interest rate differentials suggest lower prices for the U.S. dollar and higher prices for the euro currency.
STOCK INDEX FUTURES
Stock index futures are higher.
The 9:00 central time March wholesale inventories report is expected to show a 0.1% increase.
Stock index futures have performed very well recently despite a variety of bearish news.
INTEREST RATE MARKET FUTURES
Futures are lower in light of higher stock index futures.
Most likely the FOMC will keeps its fed funds rate unchanged at its June 14 policy meeting.
The technicals and fundamentals remain supportive.
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