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RBA Leaves Rates Unchanged

by Archer Financial Services | Dec 05, 2017

By Alan Bush | Senior Financial Economist at ADMIS     

STOCK INDEX FUTURES

S&P 500 and Dow Jones futures advanced to record highs yesterday after over the weekend the Senate passed its version of a $1.4 trillion package of tax cuts in a narrow 51-49 vote. This vote moves the legislation closer to approval by the end of the year.

Talks will likely begin next week between the Senate and the House, which had approved its own version of the legislation.

Once the bills are reconciled, the resulting legislation could cut corporate tax rates to 20% from 35%.

The 8:45 central time November PMI services index report is expected to be 54.7 and the 9:00 November Institute for Supply Management nonmanufacturing index is anticipated to be 59.

The computer models that I use continue to generate bullish signals for stock index futures.

The main trend for stock index futures is higher.

 

CURRENCY FUTURES

The U.S. dollar gained in spite of news that the U.S. trade deficit widened in October.

The trade gap in goods and services expanded 8.6% from the prior month to a seasonally adjusted $48.73 billion in October. Economists had expected a narrower deficit of $47.5 billion.

The British pound declined due to disappointment over the lack of a Brexit deal.

The Canadian dollar advanced on news that Canada's trade deficit in October narrowed from the previous month to a seasonally adjusted 1.47 billion Canadian dollars. 

The Australian dollar is higher after data showed stronger retail sales.

The Reserve Bank of Australia held its regularly scheduled policy meeting today. Australia’s central bank kept its cash rate target at a record low of 1.5%, which was widely expected by economists.

This decision comes after RBA Governor Philip Lowe late last month told economists there is no compelling reason for a change in interest rates. 

  

INTEREST RATE MARKET FUTURES

The U.S. Senate Banking Committee will vote on the nomination of Jerome Powell to be chairman of the Federal Reserve.

There are no Federal Reserve speakers scheduled for today.

The Treasury will auction 52 week bills today.

According to financial futures markets, the probability that the Federal Open Market Committee will increase its fed funds rate at the December 12-13 meeting is over than 99%.

 

SUPPORT AND RESISTANCE

December 17   S&P 500

Support    2633.00       Resistance    2651.00

 

December 17   U.S. Dollar Index

Support    92.960         Resistance    93.370

 

December 17    Euro Currency

Support    1.18170       Resistance    1.18930

 

December 17    Japanese Yen

Support    .88650         Resistance    .89090

 

December 17    Canadian Dollar

Support    .78730         Resistance    .79310

 

December 17   Australian Dollar

Support    .7595           Resistance    .7667

 

March 18   Thirty Year Treasury Bonds

Support    152^16        Resistance    153^8

 

February 18   Gold

Support    1267.0         Resistance    1283.0

 

March 18   Copper

Support    2.9700         Resistance    3.1100

 

January 18   Crude Oil

Support    57.02           Resistance    57.98

 

 

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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