Written Commentary
FOMC Statement Issued Today
May 1, 2024
by Alan Bush
STOCK INDEX FUTURES
Stock index futures are higher despite ongoing U.S.-China tensions as traders look to earnings and economic data.
Stock index futures are higher despite lower crude oil prices.
The Automatic Data Processing Inc. employment change report showed a decline of 20,236,000 when a decline of 20,000,000 was expected.
Mortgage applications to purchase a home in the week ended May 1 increased for the third straight week, up 7.0% compared with a week earlier.
In recent weeks stock index futures have overperformed the news.
CURRENCY FUTURES
The U.S. dollar is higher for a fourth 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 continues to decline after yesterday’s court ruling in Germany that raised questions about the European Central Bank’s main bond buying program. The court ruled that some actions taken by the country’s Bundesbank to participate in the asset purchase program were unconstitutional.
There was additional pressure on the euro on news that retail trade in March declined 11.2% in the euro area compared to February.
The British pound fell after a survey showed a record decline in U.K. construction work.
INTEREST RATE MARKET FUTURES
Flight to quality longs are being liquidated in light of higher stock index futures.
Supply remains an issue after yesterday the U.S. Treasury Department reported that it expects to borrow $3 trillion in the second quarter to pay for the aid packages passed by Congress last month.
Raphael Bostic of the Federal Reserve will speak at 12:30.
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.
