Written Commentary
GOLD AND SILVER FUTURES
The double top in June gold futures at 1799.5 on the daily chart will likely be taken out on the upside. Most major central banks will probably keep their accommodation for longer, which is a longer-term bullish influence for the precious metals.
STOCK INDEX FUTURES
Yesterday Dow futures registered a new record high. U.S. stock index futures are mixed today.
Jobless claims in the week ended May 1 were 498,000 when 533,000 were expected.
First quarter nonfarm productivity increased 5.4% when a gain of 3.7% was anticipated and unit labor costs fell 0.3% when a decline of 0.6% was estimated.
The technical picture remains supportive for stock index futures.
CURRENCY FUTURES
The U.S. dollar index is lower after Federal Reserve speakers downplayed the risks of higher inflation.
The euro currency is higher on news that euro zone retail sales increased 2.7% from a month earlier in March, easing from an upwardly revised 4.2 % advance in February and beating market expectations of 1.5% growth.
In addition, new orders for German manufactured goods jumped 3.0% month-over-month in March, following an upwardly revised 1.4% growth in February and beating the market consensus of a 1.7% advance. This was the largest increase in new orders since last October.
The Bank of England at its policy meeting today kept interest rates unchanged, as expected. The BOE raised its 2021 GDP forecast to 7.25%, as widely anticipated.
A U.K. services PMI was revised higher to 61.0 in April, from a preliminary estimate of 60.1, which was the fastest pace of expansion since October 2013.
The Japanese yen is lower after the Bank of Japan stressed the need for low interest rates.
INTEREST RATE MARKET FUTURES
Chicago Federal Reserve President Charles Evans reiterated Wednesday his concerns about reaching the 2.0% inflation goal, while Fed Governor Michelle Bowman noted that the U.S. economy may be growing more quickly than previously anticipated.
Federal Reserve speakers today are John Williams at 8:00, Robert Kaplan at 9:00, Raphael Bostic at 12:00, Loretta Mester at 12:00 and Robert Kaplan at 5:05.
Futures have held up well since early April in spite of mostly bearish news, including a proposed new $1.8 trillion spending plan, which is viewed as inflationary.
In my minority view, I am seeing indications that global economy will continue to improve, but growth may not be as strong as many analysts are predicting.
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