US futures flat ahead of heavy data session

US futures flat ahead of heavy data session

By Craig Erlam on Mar 3, 2014 08:06:12 GMT

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  • European indices erase gains as hopes of ECB rate cut fade;
  • US futures flat ahead of heavy data session;
  • US GDP expected to be revised lower.

US futures, like their European counterparts, are lacking any direction on Friday. As it stands, the S&P and the Dow are unchanged at 1,854 and 16,272, respectively, and the Nasdaq is 3 points lower, at 4,315.

European indices had traded higher earlier on in the session on expectations that the rate of inflation in February would fall, forcing the ECB to consider a rate cut at the very least at the meeting next week. However, the preliminary reading, rather than slipping closer to deflationary territory as expected, remained at 0.8%, seriously reducing the chances of a rate cut next week.

European stocks didn’t take long to wipe out their earlier gains to trade flat on the day, while the euro surged against the dollar, smashing through previous highs before finding resistance around 1.3810. The pair faces significant resistance just above here around 1.3840, a break above this level could prompt significant gains in the coming weeks.

There may be little driving markets early in the session but I’m sure that will all change as we near the opening bell on Wall Street. There’s plenty of US data being released today, starting with the second reading of the fourth quarter GDP figure, which is expected to be revised lower to 2.5% on an annualised basis, from 3.2% previously.

This would be a bit of a blow to the US economy, as this was previously seen as evidence that the recovery is strong and the poor data in December and January was temporary. If this is revised lower it may hit confidence in the US and add to the belief that some of the momentum has been lost. I still believe the recovery is strong and sustainable, especially based on what made up that fourth quarter reading but it’s the US public and the markets that need convincing.

Also being released today is the final UoM consumer sentiment reading which is expected to be revised slightly higher to 81.3 for February, a good sign that the US consumer has not been put off by the poor weather and data in recent months and remains confident in the recovery. Of course this is only a survey and needs to be backed up with hard data but it is a positive sign for the coming months.

Pending home sales are up next and are expected to show a 2% monthly increase in January following the dire 8.7% drop in December. We were surprised earlier in the week at how good the new home sales figure was, maybe we could be in for a repeat today.

About Craig Erlam

Craig Erlam is Market Analyst at Alpari UK. He joined Alpari (UK) at the beginning of 2012 after four years in the financial services industry, including working at Goldman Sachs. Craig writes market commentary that regularly appears on websites including The Financial Times, Reuters, BBC, The Telegraph and FOX Business. He also provides insight and analysis for clients which he posts daily on Twitter and the Alpari (UK) website. You can also find Craig on YouTube where he gives short market updates, including charting analysis.

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