Written Commentary
STOCK INDEX FUTURES
Global stock index futures are lower before Federal Reserve Chair Jerome Powell’s and Treasury Secretary Janet Yellen‘s congressional testimony. At 11:00 central time Powell and Yellen will testify before the House Financial Services Committee.
The 9:00 central time February new home sales report is anticipated to show 875,000 and the 9:00 March Richmond Federal Reserve manufacturing index is anticipated to be 15.
Stock index futures are performing well despite recent weak economic data.
CURRENCY FUTURES
The U.S. dollar advanced to its highest level in two weeks. The greenback is stronger despite falling U.S. interest rates.
The euro currency traded lower as traders remain cautious due to increasing coronavirus infections and restrictions in Europe. Germany extended its national lockdown until April 18, joining Austria and France in tightening restrictions.
The British pound is lower despite news that the Confederation of British Industry’s order book balance increased 19 points from the previous month to -5 in March of 2021, which is the highest reading since April of 2019 and beating the market expectation of -20. The output expectations index increased 32 points to +30, which is the highest since August of 2017, and the gauge for export orders improved 19 points to -20.
The “commodity currencies,” the Canadian dollar and the Australian dollar are lower in light of weaker crude oil prices.
INTEREST RATE MARKET FUTURES
Fed Chair Powell and Treasury Secretary Janet Yellen will make their first joint appearance before the U.S. House Committee on Financial Services.
U.S. Treasury yields are lower, following the release of prepared comments from Federal Reserve Chairman Powell for the congressional hearing, in which he warned the economic recovery was “far from complete.” Powell said the economic recovery from the pandemic had “progressed more quickly than generally expected and looks to be strengthening.”
However, he said the sectors of the economy hardest hit by the pandemic “remain weak” and the unemployment rate “underestimates the shortfall,” so the recovery still has a long way to go.
There are likely not to be any surprises so soon after the March 17 Federal Open Market Committee meeting.
In addition to Fed Chair Powell, other Federal Reserve speakers today are James Bullard at 9:00, Raphael Bostic at 9:10, Thomas Barkin at 10:00, Lael Brainard at 12:25, John Williams at 1:45, Lael Brainard at 2:45 and James Bullard at 3:20.
The Treasury will auction two-year notes.
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