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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 

 

STOCK INDEX FUTURES

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. 

  

CURRENCY FUTURES

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.

     

INTEREST RATE MARKET FUTURES

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. 

 

SUPPORT AND RESISTANCE

 

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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Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The risk of loss in trading futures and options can be substantial. The views and opinions expressed in this letter are those of the author and do not reflect the views of ADM Investor Services, Inc. or its staff.  Research analyst does not currently maintain positions in the commodities specified within this report. The information provided is designed to assist in your analysis and evaluation of the futures and options markets.  However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright © ADM Investor Services, Inc.

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