Written Commentary
STOCK INDEX FUTURES
U.S. stock index futures are sharply lower due to the long-feared attack on Ukraine.
The fourth quarter U.S. gross domestic product increased 7.0%, as expected.
Jobless claims in the week ended February 19 were 232,000 when 249,000 were anticipated.
The January Chicago Federal Reserve national activity index was 0.69 when 0.15 was predicted.
The 9:00 central time January new home sales report is estimated to show 804,000.
The dominant influences remain the situation in Eastern Europe followed distantly by the hawkish Federal Reserve.
CURRENCY FUTURES
There is substantial flight to quality buying coming into the U.S. dollar.
The European currencies are lower. The Swiss franc, which is usually a flight to quality vehicle is lower.
The Japanese yen, which is often a safe haven vehicle, is underperforming and is only steady.
INTEREST RATE MARKET FUTURES
Flight to quality buying is dominating, taking futures higher.
Federal Reserve speakers today are Thomas Barkin at 8:00, Raphael Bostic at 10:10, Loretta Mester at 11:00, Thomas Barkin at 11:00 and Christopher Waller at 7:00 this evening.
The Treasury will auction 7-year notes today.
In light of increased geopolitical tensions, there is growing pressure on hawkish central banks to slow their withdrawal of accommodation.
Financial futures markets are predicting there is an 83% probability that the Federal Reserve will hike its fed funds rate by 25 basis points at its March 16 meeting. The probability was 69% last week.
Some analysts believe that if the rate of growth in the U.S. economy slows, and also globally, it may be difficult for the Federal Reserve and other major central banks to maintain ramped-up hawkish policies.
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