By Alan Bush | Senior Financial Economist at ADMIS
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.
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.
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.
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 email@example.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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