By Alan Bush | Senior Financial Economist at ADMIS
STOCK INDEX FUTURES
The U.S. consumer price index increased 0.41% in March, the biggest increase in 14 months, from the prior month, when a gain of 0.3% was expected and the consumer price index, excluding the volatile food and energy categories, or core prices, gained just 0.15% from February, which compares to the anticipated up 0.2%.
The April Atlanta Federal Reserve business inflation expectations will be released at 9:00 central time. Last month the figure was 1.9%.
My view is that the global reflation story remains on track and easier credit conditions from most of the world’s central banks are coming and will be the dominant fundamental that supports stock index futures in the long term.
The European Central Bank left its key interest rates unchanged, as expected. The interest rate on the main refinancing operations and the rates on the marginal lending facility and deposit facility will remain at 0.00%, 0.25% and minus 0.40%, respectively.
The ECB repeated that it plans to keep interest rates at current levels at least through the end of the year.
The euro currency came under pressure when ECB President Mario Draghi said risks to the euro zone growth outlook still are tilted to the downside.
The British pound is higher on news that the U.K. economy grew 0.3% in the three months to February, which was stronger than the 0.2% that many economists forecast. On the month, the economy grew 0.2%, when unchanged was forecast.
INTEREST RATE MARKET FUTURES
The Treasury will auction ten year notes today, which is the second of three auctions scheduled this week.
Federal Reserve Chairman Jerome Powell will speak about the economy at the House of Representatives Democrat’s three day annual retreat in Leesburg, Virginia.
Other speakers from the Fed are Federal Reserve Board of Governors Vice Chairman for Supervision Randal Quarles at 10:50 and Dallas Federal Reserve Bank President Robert Kaplan at 6:00 this evening.
Investors will be closely watching when the Fed publishes the minutes from its March policy meeting on 1:00, which may provide additional clues about the central bank's expectations for growth and inflation.
Financial futures are predicting there is a 53% probability that the Federal Open Market Committee will lower its fed funds rate by 25 basis points or more at its December 11 policy meeting. Yesterday the probability was 50%.
For more information about these markets, please contact Alan at 312.242.7911 or via email at email@example.com. Thank you.
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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 risk of loss in trading futures and options can be substantial. The views and opinions expressed in this letter are those of the author and do not reflect the views of ADM Investor Services, Inc. or its staff. Research analyst does not currently maintain positions in the commodities specified within this report. 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.
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