Written Commentary
CURRENCY FUTURES
The U.S. dollar is lower due to the smaller than estimated ADP employment change report.
The S&P Global composite PMI for the euro zone increased to 53.7 from 52.0 in February, its highest level since May of last year. However, this was slightly lower than the preliminary estimate of 54.1 that was released last week.
Factory orders in Germany unexpectedly increased 4.8% month-over-month in February, following a downwardly revised 0.5% gain in January and substantially above forecasts of a 0.3% increase.
STOCK INDEX FUTURES
S&P 500 futures advanced to a seven-week high yesterday.
Mortgage applications declined 4.1% in the week ending March 31, which is the first period of decline since the week ending February 24, according to data from the Mortgage Bankers Association. Applications to refinance a home loan fell 5.4%, and were 59% lower than a year ago, and those to purchase a home loan were down 3.5%, down 35% on a year-on-year basis.
The ADP employment report showed an increase of 145,000 when up 261,000 was expected.
The 8:45 central time March PMI services index is anticipated to be 53.8.
The 9:00 March Institute for Supply Management services index is predicted to be 54.4.
Stock index futures have performed very well considering recent strains in the international financial system and hawkish comments from Federal Reserve officials.
INTEREST RATE MARKET FUTURES
Loretta Mester of the Federal Reserve Bank of Cleveland said policymakers should move their benchmark rate above 5.0% this year and hold it at restrictive levels for some time, with the exact level depending on how quickly price pressures ease.
Underlying support remains due to the belief that central banks will not be able to keep raising interest rates much longer.
The technicals and fundamentals for futures have become more supportive since early March.
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