Written Commentary
STOCK INDEX FUTURES
U.S. stock index futures are higher, including new record highs for NASDAQ futures, due to a more optimistic tone to the U.S.-China trade situation.
In addition, there is ongoing support from global central banks’ stimulus measures and investors’ optimism about the pace of the global economic recovery.
The 8:45 central time June PMI composite flash is expected to be 45.
The 9:00 May new home sales report is anticipated show 630,000 and the 9:00 June Richmond Federal Reserve manufacturing index is estimated to be negative 5.
The technical situation remains positive for stock index futures.
CURRENCY FUTURES
The U.S. dollar is lower, and the euro currency is higher.
Some of the gains in the euro were linked to the stronger than predicted PMIs. The German June manufacturing PMI flash was 44.6 when 41.0 was predicted.
The euro is higher in spite of news that European car sales are estimated to drop by a record 25% this year. Sales in the European Union are expected to decline to 9.6 million vehicles from 12.8 million last year, according to the European Automobile Manufacturers Association.
In spite of today’s price moves, the U.S. dollar appears to be bottoming and the euro currency appears to be topping, especially now that the European Central Bank is becoming more accommodative.
The British pound is higher after the U.K. PMIs for June all came in stronger than economists were expecting.
INTEREST RATE MARKET FUTURES
Futures are lower at the long end of the curve in light of higher stock index futures, a more optimistic tone to the U.S.-China trade situation and stronger than expected PMIs in Europe.
St. Louis Federal Reserve President James Bullard will speak at 12:00.
The Treasury will auction two-year notes today.
According to financial futures markets there is a 95.6% probability that the Federal Open Market Committee will leave its fed funds rate unchanged at zero to 25 basis points at its July 29 policy meeting.
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