Written Commentary
STOCK INDEX FUTURES
The January producer price index increased 0.7% when up 0.4% was expected.
Housing starts in January were 1.309 million when 1.365 million were anticipated and building permits were 1.339 million, which compares to the estimated 1.350 million.
Jobless claims in the week ended February 11 were 194,000 when 200,000 were predicted
The February Philadelphia Federal Reserve manufacturing index was -24.3 when -7.2 was expected.
Some afternoon recovery is likely for futures.
CURRENCY FUTURES
The U.S. dollar index is being supported by the larger than anticipated increase in the U.S. producer price index.
Inflation numbers in Europe have recently come in lower than anticipated. Today it was reported that Ireland’s consumer price inflation rate eased for a third consecutive month to 7.8% year-on-year in January 2023, which is the lowest since last May.
Exports in Japan in January increased 3.5% on the year when a decline of 0.5% was expected.
Figures from the Australian Bureau of Statistics showed Australia’s employment surprised in January by falling for a second straight month, while the jobless rate jumped to its highest since last May. The jobless rate climbed to 3.7% when analysts had anticipated it to hold at 3.5%. Net employment fell 11,500 in January from December when they dropped a revised 19,900. Market forecasts had been for an increase of 20,000 in January.
This lessens pressure on the Reserve Bank of Australia for further aggressive interest rate hikes.
INTEREST RATE MARKET FUTURES
Futures are lower due to this morning’s bearish on balance economic reports.
Federal Reserve speakers today are Loretta Mester at 7:45, James Bullard at 12:30, Lisa Cook at 3:00 and Loretta Mester 5:00.
Most likely the Federal Open Market Committee will increase its fed funds rate by 25 basis points at its March 22 policy meeting.
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