STOCK INDEX FUTURES
Prices are lower due to a report that the European Union bailout for Greece has been delayed and after news that Moody's Investors Service said it may downgrade U.S. and overseas banks.
Initial jobless claims in the week ended February 11, were down 13,000, to 348,000, when 365,000 were anticipated and continuing claims in the week ended February 4 were 3.426 million, which compares to the estimate of 3.495 million.
January housing starts increased 1.5% to 699,00, when 675,000 were anticipated and building permits advanced .7% to 676,000, when 680,000 were estimated.
The January producer price index increased .1%, which compares to the estimate of a .4% increase and the producer price index, excluding food and energy, advanced .4%, when a .2% increase was estimated.
The 9:00 central time, February Philadelphia Federal Reserve index is expected to be 9.
According to a Bloomberg report, approximately 69% of the 360 corporations in the S&P 500 that have reported earnings since January 9 have beat analysts' estimates.
Some technical damage to the charts was done yesterday.
CURRENCY FUTURES
The euro declined for the third day and to a three-week low, on news that the European Union bailout for Greece has been delayed. Yesterday, euro zone monetary officials postponed their decision on additional aid for Greece until at least February 20.
Pressure on the euro was limited by news that Spain was able to sell more debt than they anticipated and after French borrowing costs declined in a government debt auction.
The euro continues to be undermined by the growing feeling that Greece will eventually default on their debt.
The British pound gained on the euro after a report showed U.K. consumer confidence improved in January to its best level in five months.
The Australian dollar firmed after a government report showed employment in Australia was stronger than anticipated.
Recently, the euro started to underperform the news , which is a sign of weakness.
Our analysis indicates the euro zone economy will enter into recession and the value of the euro will decline against the U.S. dollar in the long term.
INTEREST RATE MARKET FUTURES
Futures gained in the overnight trade due to the ongoing financial problems in the euro zone and on prospects of a ratings downgrade of global financial institutions. Futures came under pressure more recently when the bearish on balance 7:30 U.S. economic reports were released.
Yesterday's release of the minutes of the January 24-25 Federal Open Market Committee meeting showed only a few policy makers thought there would be another quantitative easing program.
Longer term, Treasury futures are likely to be supported by a variety of flight to quality influences.
These include the continuing tensions in the Middle East, increasing prospects of a recession in the euro zone, a trend toward weaker economic data from China, along with fears that the Chinese economy is headed for a hard landing.
Expect Treasury futures to trade higher from current lower levels.
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