December CPI Revised Lower

STOCK INDEX FUTURES

Stock index futures quickly advanced when the revised December U.S. consumer price index report showed an increase of 0.2%, which compares to the previously reported 0.3% advance. The December core consumer price index was up 0.3% and was unchanged.

The fundamentals and technicals remain supportive to stock index futures.

CURRENCY FUTURES

The U.S. dollar index was a little higher in the overnight trade but fell when the December consumer price index was revised lower to up 0.2%.

Interest rate differentials remain supportive to the greenback.

The Bank of France Governor Francois Villeroy de Galhau said the European Central Bank will likely lower interest rates in 2024 as the pace of price increases eases toward 2.0% by next year. He said, “We will probably cut rates this year because we are making progress against inflation.”

INTEREST RATE MARKET FUTURES

Futures were mixed in the overnight trade but quickly advanced when the revised December consumer price index report was released.

Yesterday Federal Reserve Bank of Richmond President Thomas Barkin reiterated that policymakers have time to be patient about the timing of interest rate cuts.

Dallas Federal Reserve President Lorie Logan will speak at 12:30 central time.

Financial futures markets are predicting there is a 20% probability that the Federal Open Market Committee will lower its fed funds rate by 25 basis points at the March 20 meeting and an 80% chance that the Fed will keep rates unchanged.

The fundamentals and technicals are not encouraging for the bull camp.

 

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