Written Commentary
STOCK INDEX FUTURES
Stock index futures are higher due to optimism surrounding Ukraine and Russia talks.
The 9:00 central time March consumer confidence index is expected to be 107.0 and the 9:00 February Job Openings and Labor Turnover Survey is anticipated to be 11.100 million. The Labor Department’s JOLTS report tracks monthly changes in job openings and offers rates on hiring and quits.
The technicals are supportive after major downtrend lines were taken out on the upside two weeks ago.
The dominant influences remain geopolitical tensions and the hawkish Federal Reserve.
CURRENCY FUTURES
The U.S. dollar index is lower as flight to quality longs are liquidated. Yesterday the greenback advanced above a three-week triangle pattern, but gave back all of those gains today.
The number of mortgage approvals for house purchases in the U.K., which is an indicator of future borrowing, fell slightly to 71,000 in February of 2022 from 73,800 in January. This compares with market expectations of 74,850.
The Japanese yen fell to a nearly 7-year low yesterday but is higher today.
Interest rate differential expectations suggest the Japanese yen will trend lower longer term.
Average weekly earnings of non-farm payroll employees in Canada increased 2.5% year-on-year in January of 2022. This was the eighth consecutive month of increases in average weekly earnings.
INTEREST RATE MARKET FUTURES
Yesterday the 30-year Treasury bond futures fell to the lowest level since May 2019 before a recovery.
The Treasury will auction 7-year notes today.
Federal Reserve speakers today John Williams at 9:00, Patrick Harker at 9:45 and Raphael Bostic at 8:30 this evening.
President of the New York Federal Reserve John Williams last week said he was open to a half-percentage-point interest rate increase if warranted by the economy.
Some parts of the yield curve have inverted recently, which is a sign that traders worry that a Fed tightening will hurt the economy.
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