NY Federal Reserve's Empire State Business Conditions Improve

by AFS Archer Financial Svcs | Apr 15, 2019

By Alan Bush | Senior Financial Economist at ADMIS   


U.S. stock index futures are a little lower even though Treasury Secretary Steven Mnuchin on Saturday said the U.S. and China are continuing to make progress on trade talks and are “getting close to the final round of concluding issues.” 

Separately, there were reports that U.S. negotiators tempered demands that China reduce industrial subsidies as a condition for a trade agreement after resistance from Beijing, which marks a concession on a core U.S. objective for the trade talks.   

The New York Federal Reserve’s Empire State business conditions index in April rebounded to 10.1 from a nearly two year low of 3.7 in March. Economists had expected a reading of 6.8.   

Earnings remain in focus this week. The consensus estimate is for corporate earnings to fall 4.7% in the first quarter, according to FactSet.

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.

Although stock index future are lower this morning, I expect a move to higher on the day


The U.S. dollar is lower in spite of the stronger than anticipated New York Fed’s Empire State business conditions index. 

The Japanese yen and the Swiss franc hit their lowest levels in almost a month as a rally in global markets reduced demand for currencies considered to be safe havens. 

The Canadian dollar and the Australian dollar are higher in spite of lower crude oil prices.


The International Monetary Fund in its annual report on global fiscal policies singled out Germany, Korea and Australia as countries that could do more to improve the slowing global economy, while central banks, including the U.S. Federal Reserve and the European Central Bank indicated continued dovishness. 

Earlier today, Chicago Federal Reserve Bank President Charles Evans said inflation is a little weaker than he would like to see. He also said he doesn’t want to see the Fed to go to a restrictive position prematurely. 

At 11:00 Charles Evans will speak about current economic conditions and monetary policy and Boston Federal Reserve Bank President Eric Rosengren will speak about the economy and monetary policy at 7:00 p.m.

Financial futures are predicting there is a 38% 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. On Friday the probability was 40%.

For more information about these markets, please contact Alan at 312.242.7911  or via email at alan.bush@admis.com. Thank you.

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