Written Commentary
STOCK INDEX FUTURES
U.S. stock index futures are higher due to mostly better than expected corporate earnings.
Investors are continuing to monitor the corporate earnings season with 111 companies from the S&P 500 index reporting this week.
The national employment report from Automated Data Processing, Inc. showed employment in the U.S. private sector increased by 174,000 in January. The market expectation was a 50,000 increase.
The 8:45 central time January PMI composite final is anticipated to be 58.
The 9:00 January Institute for Supply Management services index is estimated to be 56.8.
CURRENCY FUTURES
The euro currency is lower despite news that the annual inflation rate in the euro area jumped to 0.9% in January, which is the most in 11 months. This ended five months of deflation and beat market forecasts of 0.5%. The euro currency is near major chart support on the weekly chart at 1.20000-1.20150.
The Bank of England will hold its monetary policy meeting on Thursday. Policies are predicted to remain unchanged.
A services PMI in Japan came in at 46.1 in January, which is the twelfth straight month of contraction in the sector and at the steepest pace in five months.
The Australian dollar is higher on news that the number of dwellings approved in Australia jumped by 10.9% month-over-month in December, which is the fourth straight month of increase in building permits and the steepest pace in three months. This bullish news was partially offset by a report that the Markit’s Purchasing Managers Index in services declined to 55.6 points in January from 57.0 in December.
INTEREST RATE MARKET FUTURES
Federal Reserve speakers today are Neel Kashkari at 7:30, James Bullard at 12:00, Patrick Harker at 1:00, Loretta Mester at 4:00, Charles Evans at 4:00 and Robert Kaplan at 5:05.
In light of the Federal Reserve pledging not to hike its fed funds rate until possibly 2023, futures at the short end of the curve are likely to hold steady.
Futures at the long end of the yield curve will likely remain in a trading range, as the fundamentals are now mixed.
The next Federal Open Market Committee meeting is scheduled for March 17.
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