Written Commentary
FOMC Statement Issued Today
May 1, 2024
by Alan Bush
STOCK INDEX FUTURES
Despite lower prices yesterday the S&P 500 closed out April on a high note and posted its best monthly gain since 1987.
However, prices are lower today due to weaker than expected corporate earnings and renewed trade war fears.
The 8:45 central time April PMI manufacturing index is anticipated to be 36.9.
The 9:00 April Institute for Supply Management manufacturing index is anticipated to be 37.5 and the 9:00 March construction spending report is estimated to show a decline of 3.5%.
Global trade issues in recent years tended to be a temporary negative influence on stock index futures.
CURRENCY FUTURES
The U.S. dollar is lower for a sixth day after falling under an eight-day uptrend line on Monday.
The greenback continues to be under pressure after Wednesday’s dovish comments from Federal Reserve Chairman Jerome Powell.
The euro currency is higher even though the European Central Bank said that under different economic scenarios the euro zone economy could shrink by between 5% and 12% this year and grow between 4% and 6% next year.
The British pound is lower after a report showed U.K. output, new orders and employment fell at record rates. Another report said British manufacturers suffered the largest decline in output and orders for at least three decades in April.
Safe haven buying is coming into the Japanese yen. The yen is higher despite news that the Tokyo April core CPI was down 0.1% on the year when analysts expected an increase of 0.1%.
The Australian dollar is lower after news that house prices increased at slower pace in the period from June last year through April. Residential house prices increased 0.3% in April compared with a gain of 0.7% in March.
In the longer-term analysis there are no major disparities in interest rate differential expectations in the currency markets with all the major central banks adding more accommodation to their banking systems in one form or another.
INTEREST RATE MARKET FUTURES
There was only limited flight to quality buy coming into the market.
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.
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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 information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. 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.
