Monday March 28th

28-03-2016

Futures hold higher amid data

U.S. stock index futures pointed to slightly higher open Monday after the long Easter weekend as investors considered recent hawkish remarks from officials at the U.S. Federal Reserve which could herald a U.S. interest rate increase as soon as next month. Consumer spending edged up 0.1 percent in February, while personal income rose 0.2 percent. Excluding food and energy, prices gained 0.1 percent after advancing 0.3 percent in January. In the 12 months through February, the so-called core PCE price index increased 1.7 percent after a similar increase in January, Reuters said. Dow futures were off earlier highs to trade about 30 points higher. The U.S. dollar index gave up gains, with the euro near $1.1177 as of 8:38 a.m. ET. Treasury yields held little changed, with the 2-year yield near 0.87 percent and the 10-year yield around 1.90 percent. Tuesday sees Fed Chair Janet Yellen speaking on economic and monetary policy and investors will be parsing her speech for more clues on how many rate hikes the Open Markets Committee are looking at and when. Federal Reserve Chair Janet Yellen holds a press conference following the two-day Federal Open Market Committee (FOMC) policy meeting in Washington March 16, 2016. Her remarks will follow those made by St. Louis Fed President James Bullard in a speech last week where he stated another U.S. interest rate hike "may not be far off." Early on Monday ET, San Francisco Fed President John Williams told CNBC the U.S. economy was doing "quite well" and that global developments are preventing the United States from returning to normalized interest rates. In other economic news, pending home sales are due at 10 a.m. Markets in Europe were closed for a public holiday while, in Asia, Japan's benchmark Nikkei 225 closed up 0.77 percent, the Topix added 1.16 percent and the Kospi closed nearly flat at 1,982.54. There are no major company earnings announcements expected Monday. Oil prices climbed slightly in thin Easter holiday trading on Monday, adding to gains in recent weeks on optimism that major producers will freeze production. U.S. crude's front-month contract was up 32 cents at $39.78 a barrel by 8:29 a.m. ET (1229 GMT). Last week, the contract rose 2 cents, finishing up for a sixth straight week. Brent's front-month rose 10 cents to $40.54 a barrel. Last week, it fell 76 cents, or nearly 2 percent, its first decline in five weeks. Oil prices have risen about 50 percent from multi-year lows hit in January on glut worries. Prices have been supported by disruptions to oil supplies in Nigeria and Iraq and plans by major producers to freeze their output at January levels. Gold hit its lowest in a month on Monday, as the dollar firmed ahead of new U.S. economic data and speeches by Federal Reserve officials that may signal more interest rate increases than anticipated. All eyes will be on Fed Chair Janet Yellen who speaks on the U.S. economy and monetary policy on Tuesday, with investors looking for further clues on the number and timing of rate hikes this year. Spot gold was up 0.2 percent at $1,218.56 an ounce, after touching a session low of $1,208.15, its cheapest since Feb. 23. The metal lost 3 percent last week, its biggest weekly loss since November on speculation that the next U.S. rate increase could come as soon as next month. Gold futures for April delivery were down 0.2 percent, or $2.40, at $1,218 an ounce. Liquidity was thin as London and many other gold markets were closed for the Easter Monday holiday.