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ADP Report a Little Weaker

by Archer Financial Services | Oct 04, 2017
By Alan Bush | Senior Financial Economist at ADMIS       

STOCK INDEX FUTURES

The Automatic Data Processing employment change report showed private sector employment slowed in September as firms added 135,000 jobs. This compares to expectations of a gain of 150,000 jobs.  

The 8:45 central time September Services PMI is anticipated to be 55.1 and the 9:00 September Institute for Supply Management nonmanufacturing index is estimated to be 55.5.   

The main trend for stock index futures is higher.

 

CURRENCY FUTURES

The U.S. dollar is lower as a major resistance area is holding and in spite of increasing probabilities of a fed funds rate hike in December. 

In addition, some of the selling in the greenback can be attributed to a report that said Fed Governor Jerome Powell was favored by U.S. Treasury Secretary Steven Mnuchin over former Fed Governor Kevin Warsh. Janet Yellen’s term as Fed Chair will expire in February.

Powell is perceived to be more dovish than Warsh.

The euro currency is higher in spite of news that retail sales declined in the euro zone for the second consecutive month in August.   

The British pound is higher on news that business activity in Britain's service sector edged up in September from an almost one year low in the previous month. A purchasing managers’ index for the services industry increased to 53.6 in September, which is up from 53.2 in August.

The Canadian dollar and the Australian dollar are higher due to firmer crude oil prices.

 

INTEREST RATE MARKET FUTURES

Federal Reserve speakers today are St. Louis Federal Reserve Bank President James Bullard at 2:00 and Federal Reserve Chair Janet Yellen at 2:15.

The Federal Reserve appears to be on track to raise its fed funds rate for a third time this year, and the fifth since late 2015, to a range between 1.25% and 1.50%.

According to financial futures markets, the probability that the Federal Open Market Committee will increase its fed funds rate at the December 13 meeting is 83%, which compares to 78% yesterday.

The long term fundamentals for futures are mixed.

 

SUPPORT AND RESISTANCE

 

December 17   S&P 500

Support    2526.00       Resistance    2536.00

 

December 17   U.S. Dollar Index

Support    93.010         Resistance    93.550

 

December 17    Euro Currency

Support    1.17720       Resistance    1.18470

 

December 17    Japanese Yen

Support    .88760         Resistance    .89470

 

December 17    Canadian Dollar

Support    .80010         Resistance    .80450

 

December 17   Australian Dollar

Support    .7814           Resistance    .7878

 

December 17   Thirty Year Treasury Bonds

Support    152^18        Resistance    153^12

 

December 17   Gold

Support    1270.0         Resistance    1288.0

 

December 17   Copper

Support    2.9400         Resistance    2.9800

 

November 17   Crude Oil

Support    49.79           Resistance    50.63

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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