Stock Index Futures Holding up Despite Bearish News

STOCK INDEX FUTURES

Nonfarm payrolls fell 701,000 in March when a decline of 150,000 was expected. The unemployment rate for March increased to 4.4%, which compares to the anticipated 3.8%.

The 8:45 central time March final services PMI is expected to be 38.7 and the 9:00 March Institute for Supply Management nonmanufacturing PMI is anticipated to be 43.5.

Stock index futures are higher now than they were when the weaker than expected U.S. employment numbers were released. This suggests there could be a move higher later today for stock index futures.

CURRENCY FUTURES

The U.S. dollar is higher despite the large decline in U.S. nonfarm payrolls.

The euro currency is lower after the March euro zone composite PMI fell to 29.7 when 31.4 was forecast. In February composite PMI was 51.6.

In addition, there was pressure on the euro on news that German new car registrations fell 38% in March, which is the largest decline in the passenger car market in one month since Germany was reunified.

The British pound is lower after March data indicated the steepest downturn across the U.K. service sector in over two decades.

INTEREST RATE MARKET FUTURES

Futures rallied in the overnight trade on the belief that more accommodation is forthcoming from the worlds central banks.

Today the People's Bank of China said it would cut the reserve requirement ratio for city commercial banks and rural lenders by one percentage point, which would free up 400 billion yuan ($56.48 billion) in liquidity in the banking system. The PBOC said the reserve ratio will be reduced in two batches on April 15 and May 15.

On Wednesday the Federal Reserve said it was temporarily taking measures to ease a capital requirement for large banks to address strained conditions in the Treasury market. The Fed said it was easing the supplementary leverage ratio for one year and hoped the change would free up lenders' ability to serve homeowners and businesses.

There did not appear to be any new flight to quality buying coming into the market when the weak U.S. nonfarm payrolls report was released. If I am correct in my belief that stock index futures can trade higher on the day, the interest rate futures market will trend lower from the current higher levels.

Contact Alan for more extensive information on these markets at 312.242.7911 or via email at alan.bush@admis.com. Thank you.

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