Most Flight to Quality Vehicles Advancing, but Not the U.S. Dollar

by Archer Financial Services | Jun 06, 2017
By Alan Bush | Senior Financial Economist at ADMIS 



Prices are lower ahead of a series of political and economic events due on Thursday, including former U.S. Federal Bureau of Investigation Director James Comey's public testimony, the U.K. parliamentary election and the European Central Bank’s policy meeting.

In addition, traders are also closely monitoring the ongoing geopolitical tensions in the Middle East.  

At 9:00 central time the Labor Department will release the April Job Openings and Labor Turnover Survey, which is expected to show 5.75 million, compared to the 5.743 million reported in March.

The main trend for stock index futures is higher. 



The U.S. dollar is lower even though other flight to quality vehicles, such as U.S. Treasuries, gold and the Japanese yen are higher. Once again the U. S. dollar is ignoring bullish news, which should be viewed as a sign of weakness.

Expect the U.S. dollar to continue to underperform, while the euro currency continues to advance.

The British pound is lower after a report showed U.K. retail sales declined for the fourth time in five months.

Flight to quality buying is coming into the Japanese yen causing it to advance to a seven week high.

The Reserve Bank of Australia left interest rates on hold as expected, indicating it is satisfied with the progress of the economy and that inflation is likely to increase. 

There was some talk yesterday that the central bank’s next move could be an interest rate reduction to counter a softer economy.  

Some economists are predicting Australia’s economy shrank in the first three months of 2017, which would be the second contraction in three quarters.



Flight to quality buying is coming into Treasury futures, especially at the long end of the curve.

The Federal Open Market Committee is widely expected to raise interest rates at its June 14 meeting with the probability of a rate hike at 91%, which compares to 96% yesterday. 




June 17   S&P 500

Support    2423.00       Resistance    2438.00


June 17   U.S. Dollar Index

Support    96.360         Resistance    96.830


June 17    Euro Currency

Support    1.12390       Resistance    1.12980


June 17    Japanese Yen

Support    .90470         Resistance    .91660


June 17    Canadian Dollar

Support    .74050         Resistance    .74490


June 17   Australian Dollar

Support    .7446           Resistance    .7515


September 17   Thirty Year Treasury Bonds

Support    154^0          Resistance    155^16


August 17   Gold

Support    1279.0         Resistance    1300.3


July 17   Copper

Support    2.5150         Resistance    2.5700


July 17   Crude Oil

Support    46.73           Resistance    48.03

For more information about these markets, please contact Alan at 312.242.7911 or via email at alan.bush@admis.com. Thank you.


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