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Stock Index Futures Advance

by AFS Archer Financial Svcs | May 07, 2020

By Alan Bush | Senior Financial Economist at ADMIS    

ADMIS Today TV on Financials

STOCK INDEX FUTURES

Stock index futures are higher due to U.S.-China trade talk optimism. Top trade negotiators Robert Lighthizer and Liu He are expected to speak on U.S.-China trade as early as next week.    

Higher crude oil price also supported stock index futures. 

Stock index futures are higher despite jobless claims in the week ended May 2 coming in at 3.17 million when 3.04 million were expected. 

In recent weeks stock index futures have overperformed the news.

CURRENCY FUTURES

The U.S. dollar is higher for a fifth day but remains in a trading range. Recent strength in the greenback is due to global U.S. dollar shortages as emerging markets lose reserves. 

The euro currency is lower after a report showed German industrial production fell 9.2% in March from February. Economists had forecast an 8.8% decline. 

The British pound is steady after the Bank of England at its policy meeting today left key interest rates and its bond-buying program unchanged. 

The U.K. central bank's Monetary Policy Committee agreed to leave the BOE's benchmark interest rate unchanged at 0.1% and the size of its bond-buying program at 645 billion pounds ($798 billion). 

Bank of England Governor Andrew Bailey said the central bank is not ruling anything out on further policy measures. 

This caused traders to believe that there could be more economic stimulus from the BOE at the June meeting. 

The Bank of England said it expects the U.K. economy to shrink by approximately 25% in the second quarter followed by a gradual recovery in the second half of the year.    

INTEREST RATE MARKET FUTURES

Futures are higher due to prospects of increased accommodation from the world’s central banks.  

 

Futures are higher at the long end of the curve even though yesterday the Treasury Department announced it would increase the supply of longer-dated debt to pay for stimulus measures. 

Federal Reserve speakers today are Neel Kashkari at 11:00 and Patrick Harker at 3:00. 

The 30-year Treasury bond futures remain in a broadly based congestion pattern, as the main fundamental influences affecting the long end of the curve are offsetting.

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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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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