header_img

Thirty Year Treasury Bond Futures Lower in Spite of Bullish News

by Archer Financial Services | Feb 07, 2018

By Alan Bush | Senior Financial Economist at ADMIS     
 

STOCK INDEX FUTURES

The 2:00 central time December consumer credit report is expected to show an increase of $20 billion.

The federal budget situation is the latest political headwind for stock index futures. Congress has through February 8 to find some sort of budgetary agreement to keep the government open past midnight on Friday.

Technical damage has been done, no doubt, and it may take some time to build a base.

However, this is not the beginning of any new long term bear market for stock index futures. 

 

CURRENCY FUTURES

The U.S. dollar is higher due to flight to quality buying in light of lower stock index futures. 

However, once stock index future stabilize, lower prices for the greenback are likely.

The main trend for the U.S. dollar is lower.

The euro currency is lower in spite of news that the European Union raised its forecasts for euro zone growth.

The E.U. said gross domestic product in the 19 member euro zone will grow 2.3% in 2018, raising its forecast from 2.1% in November. The economy is expected to expand 2% in 2019, which is up from 1.9% previously.

Although the euro currency is lower today, in the longer term the currency of the euro zone is likely to be supported by speculation that the European Central Bank will remove some of its accommodation later this year.

In addition, some analysts are predicting an interest rate hike from the ECB in the first quarter of 2019.

The main trend for the currency of the euro zone is higher.

The Bank of England will hold its policy meeting tomorrow.

 

INTEREST RATE MARKET FUTURES

Earlier today Dallas Federal Reserve Bank President Robert Kaplan said higher wages in the U.S. will not necessarily lead to faster inflation.

Chicago Federal Reserve Bank President Charles Evans will speak at 10:15 and San Francisco Federal Reserve Bank President John Williams will speak at 4:20 this afternoon.

Following weak demand for a $26 billion three year note sale yesterday, the U.S. Treasury will auction $24 billion of 10 year notes today.

The probability of a fed funds rate increase at the FOMC’s March 21 policy meeting is 72%, which compares to 69% yesterday. 

Once the flight to quality influence fades, futures are likely to work lower, as commodity and wage inflation accelerates this year.

This will adversely impact the 30 year Treasury bond futures the most, since the long end of the curve is the most susceptible to the inflation influence.

 

SUPPORT AND RESISTANCE

March 18   S&P 500

Support    2655.00       Resistance    2704.00

 

March 18   U.S. Dollar Index

Support    89.230         Resistance    89.830

 

March 18   Euro Currency

Support    1.23550       Resistance    1.24450

 

March 18   Japanese Yen

Support    .91270         Resistance    .92521

 

March 18   Canadian Dollar

Support    .79660         Resistance    .80090

 

March 18  Australian Dollar

Support    .7843           Resistance    .7920

 

March 18   Thirty Year Treasury Bonds

Support    145^8          Resistance    146^16

 

April 18   Gold

Support    1319.0         Resistance    1339.0

 

March 18   Copper

Support    3.1200         Resistance    3.2350

 

March 18   Crude Oil

Support    62.66           Resistance    64.19

 

 

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

Would you like to open an account with us? Go to our interactive New Account application at Open an Account. It is fast, saves on postage and it’s green.

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.

Offers