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Empire State Manufacturing Index Falls

STOCK INDEX FUTURES

Stock index futures started the week on a positive note with investors hopeful that the impasse regarding the debt ceiling would soon come to an end.

The May Empire State manufacturing index fell to negative 31.8 when negative 2.0 was expected.

Stock index futures have performed very well recently despite more hawkish comments from Federal Reserve officials.

CURRENCY FUTURES

The U.S. dollar index was lower in the overnight trade with follow-through selling in response to the weak Empire State manufacturing index.

Industrial production in the euro area declined 4.1% month-over-month in March 2023,  which compares to the anticipated 2.5% decrease.

Germany’s wholesale price index fell by 0.5% on the year and 0.4% on the previous month.

Hawkish comments from Federal Reserve officials have supported the U.S. dollar recently. However, gains in the greenback will probably be short-lived, since interest rate differentials are likely to undermine the U.S. dollar in the longer term.

INTEREST RATE MARKET FUTURES

Flight to quality longs were liquidated due to a slightly more optimistic tone to the debt ceiling situation.

In addition, there was pressure on futures when Federal Reserve Bank of Atlanta President Raphael Bostic pushed back against ideas that the central bank will cut interest rates this year. He said, “My baseline case is we won’t really be thinking about cutting until well into 2024.”

Other Federal Reserve speakers today are Neel Kashkari at 8:15 and Thomas Barkin at 11:30.

The Federal Open Market Committee will probably keep its fed funds rate unchanged at its June 14 policy meeting.

The technicals and fundamentals remain supportive to futures.

 

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Futures and options trading involve significant risk of loss and may not be suitable for everyone.  Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.  The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM.  The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared.  The information provided is designed to assist in your analysis and evaluation of the futures and options markets.  However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.

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