Written Commentary
STOCK INDEX FUTURES
U.S. stock index futures are higher on the first trading day of the month after the S&P 500 last week closed out its sixth consecutive month of gains.
Much of the strength recently is linked to strong earnings growth.
The 8:45 central time July PMI manufacturing final is expected to be 63.1.
The 9:00 July ISM manufacturing index is anticipated to be 60.8 and the June construction spending report is estimated to show a 0.3% increase.
The fundamentals and technical aspects remain positive for stock index futures.
CURRENCY FUTURES
The euro currency advanced on news that retail sales in Germany jumped 4.2% month-to-month in June of 2021, following an upwardly revised 4.6% gain in May and much better than market forecasts of 2.0%.
The Bank of England will hold its monetary policy meeting on Thursday. Officials are expected to keep rates on hold and leave the central bank’s bond-buying program unchanged.
The Reserve Bank of Australia will hold its monetary policy meeting tomorrow. The central bank may decide to postpone its decision to further scale back its weekly bond purchases. Last month the RBA reduced the amount it purchased to A$4.0 billion a week from A$5.0 billion.
INTEREST RATE MARKET FUTURES
There are no major Federal Reserve speakers scheduled for today.
Futures are higher at the long end of the curve on prospects of slowing global economic growth.
The U.S. Treasury yield curve has been flattening since May. Shorter-dated yields have been steady, while longer-dated yields have declined. A flattening yield curve suggests a slower rate of economic growth in the future.
Most major central banks are likely to delay withdrawing accommodative policies in the months ahead.
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