Morning Futures Briefing

ECB Opens Door to Rate Cuts

As expected, the European Central Bank (ECB) kept interest rates unchanged for the fifth consecutive monetary policy meeting Thursday, maintaining its main refinancing operations rate at 4.5%.

However, after the meeting, the central bank’s statement, and ECB President Christine Lagarde’s comments to the press seemed to indicate that a rate cut could come as soon as June.

ECB officials noted in the statement that “If the Governing Council’s updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission were to further increase (the ECB’s) confidence that inflation is converging to the target in a sustained manner, it would be appropriate to reduce the current level of monetary policy restriction.”

Traders also zeroed in on Lagarde’s statement that some ECB members were already prepared to cut rates at the just-concluded meeting.

Eurocurrency futures initially fell after the ECB announcement and press conference, but briefly rallied against the U.S. dollar after the U.S. producer price index came in slightly softer than expectations.

However, the euro rally was short lived as market participants now see the ECB as the next major central bank to begin a rate cut cycle following the Swiss National Bank’s (SNB) cut last month.

This morning, U.S. stock index futures were mixed in the early hours with the S&P 500® (+0.01%), the Dow Jones Industrial Average® (+0.015%), and the Russell 2000® (+0.02%) positive, but the Nasdaq-100® (–0.08%) lower.    

In Asia, the major indexes finished mixed with the Nikkei (+0.21%) trading higher, but the Hang Seng (–2.18%) and the Shanghai (–0.49%) ending lower.

European trading saw the DAX (+1.13%), the CAC (+1.14%), and the FTSE (+1.18%) markets move higher by midday.

Futures on the move

Coffee futures (/KCN24) closed at their highest levels since October 2022 on Thursday (+2.21%). Crop production concerns in Brazil and Vietnam continue to support coffee prices.

Crude oil futures (/CLK24) closed lower yesterday (–1.38%) after OPEC’s crude oil production rose in March. Oil prices were also reacting to the Wednesday’s news that U.S. crude inventories rose by a higher-than-expected 5.8 million barrels last week.

Treasury bond futures (/ZBM24) declined on Thursday (–0.27%) after the U.S. Treasury auctioned off $22 billion of 30-year bonds yesterday at a high yield of 4.671%. This was 34 basis point higher than last month’s sale and one basis point higher than market pricing just prior to the auction.

Major economic reports, trading events, and news items that could potentially impact specific futures markets:


  • U.S. import and export prices for March (interest rate futures)
  • University of Michigan Consumer Sentiment for March (interest rate and stock index futures)
  • Baker Hughes Rig Count report (crude oil and natural gas futures)

Today’s trading events

  • Futures last trading day: April lean hogs
  • Futures options last trading day: April lean hogs, May coffee, and cotton

Federal Reserve speakers

Federal Reserve presidents Raphael Bostic (Atlanta) and Mary Daly (San Francisco) are scheduled to speak today.  

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