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U.S. Dollar Underperforms the News

by Archer Financial Services | Aug 09, 2017
By Alan Bush | Senior Financial Economist at ADMIS     


STOCK INDEX FUTURES

Futures are lower as a result of escalating tensions between the U.S. and North Korea.

U.S. worker productivity increased .9% in the second quarter, which compares to the estimate of a .6% gain. 

The 9:00 central time June wholesale inventories report is anticipated to show a .6% increase.

Heightened geopolitical tensions will only temporarily get in the way of this bull market.

The main trend for stock index futures is higher. 

   

CURRENCY FUTURES

There are no flight to quality flows into the U.S. dollar, which should be viewed as a sign of weakness.

The main trend for the greenback is lower, as interest rate differential expectations remain bearish.

The main trend for the euro currency is higher.

Flight to quality buying supported the Japanese yen due to rising geopolitical tensions between the U.S. and North Korea even though some traders might argue that the geographical proximity of Japan to North Korea should have bearish implications.

The Canadian dollar and the Australian dollar are lower in spite of higher crude oil prices. 

  

INTEREST RATE MARKET FUTURES

Treasury futures are higher across the board as a result of escalating tensions between North Korea and the U.S., which spurred buying of haven assets.

The Treasury will auction ten year notes today.

At 12:00 Chicago Federal Reserve Bank President Charles Evans will speak about current economic conditions and monetary policy.

Because of rising geopolitical tensions the probability of a fed funds rate hike has declined.

The probability that the Federal Open Market Committee will increase its fed funds rate at the December 13 meeting is 44%, which compares to 50% from yesterday.

The long term fundamentals for futures are mixed.

 

SUPPORT AND RESISTANCE

September 17   S&P 500

Support    2456.00       Resistance    2472.00

 

September 17   U.S. Dollar Index

Support    93.310         Resistance    93.750

 

September 17    Euro Currency

Support    1.1701         Resistance    1.1817

 

September 17    Japanese Yen

Support    .90730         Resistance    .91590

 

September 17    Canadian Dollar

Support    .78550         Resistance    .79110

 

September 17   Australian Dollar

Support    .7844           Resistance    .7925

 

September 17   Thirty Year Treasury Bonds

Support    154^0          Resistance    155^16

 

December 17   Gold

Support    1263.0         Resistance    1286.0

 

September 17   Copper

Support    2.9250         Resistance    2.9600

 

September 17   Crude Oil

Support    48.77           Resistance    49.97

 

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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