Written Commentary
Ag Market View for May 3.24
May 3, 2024
Technical Picture Improves For Stock Indexes
- April 22, 2020
- Zoe Scott
- Follow us on Twitter @TradeADMIS
by Alan Bush
STOCK INDEX FUTURES
U.S. stock index futures are higher after the Senate signed off on a $484 billion economic aid package for small businesses late yesterday, which is the second for this sector of the economy. The bill will now be handed to the House of Representatives, which could vote on it as early as tomorrow.
A recovery in crude oil prices also was supportive.
The Mortgage Bankers’ Association reported mortgage applications in the week ended April 17 declined 0.3%. Last week there was a 7.3% increase.
In recent weeks, the technical picture has improved for index futures.
CURRENCY FUTURES
The U.S. dollar is lower and remains in a trading range, although yesterday the U.S. dollar index hit its highest level since April 8, as investors sought safety.
The euro currency is higher despite news that the German Council of Economic Experts expects the German economy will contract by 5.5% in 2020.
Italy plans to more than double an economic stimulus package.
The Japanese yen is higher in spite of news that Japan’s exports continued to contract and by a more severe 11.7% on a year to year basis in March. This was the 16th consecutive month of decline.
The British pound is higher despite a report that U.K. inflation slowed in March.
The Canadian dollar and the Australian dollar are higher due to higher crude oil prices.
The Australian dollar was also supported by news that a preliminary estimate of Australian retail sales increased 8.2% in March from February, according to the Australia Bureau of Statistics. This increase would be the strongest seasonally adjusted rise ever reported.
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
Safe-haven longs were liquidated today in light of higher stock index futures and stabilizing crude oil prices.
In keeping with the global trend of central banks lowering interest rates, the Bank of Mexico cut interest rates by half a percentage point Tuesday in its second consecutive unscheduled meeting. The central bank’s board of governors voted 5-0 to reduce the overnight funding rate target to 6% from 6.5%.
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.
