European Central Bank Tapers Slightly

STOCK INDEX FUTURES

Stock index futures edged down on worries of slowing global economic growth.

Jobless claims in the week ended September 9 were 310,000 when 344,000 were expected.

The fundamental and technical aspects remain supportive for stock index futures.

CURRENCY FUTURES

The euro currency firmed against the U.S. dollar after the European Central Bank left interest rates at record low levels but announced it would start conducting a moderately lower pace of  asset purchases for the rest of the year. The central bank said the Pandemic Emergency Purchase Program will be maintained at €1.85 trillion until at least the end of March 2022 but gave no signal of its next policy move, including how it might dismantle the Pandemic Emergency Purchase Program.

ECB President Christine Lagarde said the ECB’s decision doesn’t represent a move to phase out its bond purchases but simply is a realignment to the improved economic developments, and that the bank will remain committed to easy-money policies for years.

Many traders see this as a token step towards unwinding the emergency economic aid it put in place during the pandemic.

The Bank of Canada left its key interest rate at a record low 0.25% and maintained its current quantitative easing program at its policy meeting on Wednesday.

INTEREST RATE MARKET FUTURES

Futures are slightly higher at the long end of the curve.

Dallas Federal Reserve President Robert Kaplan said on Wednesday that he reduced his forecast for U.S. GDP growth this year but reiterated his support for starting to taper the Fed’s asset purchases in October as long as there are no fundamental changes to the outlook. Mr. Kaplan said this year the U.S. economy will probably grow 6.0%, which compares to the 6.5% pace he earlier forecast.

Federal Reserve speakers today are Charles Evans and Mary Daly at 10:05 central time, Robert Kaplan at 11:00, Michelle Bowman at 12:00, John Williams at 1:00, Neel Kashkari, Eric Rosengren and Robert Kaplan at 3:00 and Eric Rosengren at 3:25.

The 30-year Treasury bond futures remain in a two-month trading range, but are likely to ultimately break out to the upside, as the rate of growth in the global economy slows.