Written Commentary
Ag Market View for Apr 19.24
April 19, 2024
STOCK INDEX FUTURES
Stock index futures are mixed in advance of today’s conclusion of the two-day Federal Open Market Committee meeting.
Mortgage applications increased 3.0% in the week ended March 17, according to data from the Mortgage Bankers Association. Applications to refinance a home loan increased 4.9% and those to buy a home loan were up 2.2%.
Futures have held up well considering recent strains in the international financial system.
CURRENCY FUTURES
The U.S. dollar index fell for a fifth consecutive session and to its lowest level since early February. Flight to quality longs are being liquidated in the U.S. dollar again today.
The euro strengthened to the highest level in seven weeks.
The British pound advanced, after consumer price index data showed both headline and core inflation in the U.K. unexpectedly accelerated in February supporting the view that the Bank of England will deliver a 25 basis point increase in its key interest rate on Thursday. Some analysts believe this could be the last increase from the BoE in this current policy tightening cycle.
The Confederation of British Industry survey’s total order book balance fell to -20 in March 2023 from -16 in the previous month, which is the lowest level since February 2021 and below market expectations of -15.
The Reserve Bank of Australia indicated it will reconsider a case for an interest rate increase pause in April.
INTEREST RATE MARKET FUTURES
Flight to quality longs are being liquidated today.
The Federal Open Market Committee is caught between the influences of inflation and bank stability concerns.
A statement from the FOMC will be released at 1:00 central time, and Federal Reserve Chairman Jerome Powell will hold a press conference at 1:30.
Currently there is an 89% probability the FOMC will hike by 25 basis points to 4.75%-5.00% and an 11% probability of no change in the fed funds rate.
The technicals and fundamentals for the June 30-year Treasury bond futures have become more supportive in the past two weeks.
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