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Budget Agreement Supports Stock Index Futures

by Archer Financial Services | Feb 09, 2018

By Alan Bush | Senior Financial Economist at ADMIS     
 

STOCK INDEX FUTURES

The U.S. Congress voted to end the brief shutdown earlier this morning.  The House joined the Senate in passing the budget legislation that would fund the government through March 23.

The 9:00 central time December wholesale trade report is expected to show a .2% increase.

In spite of the recent correction, I am not seeing the beginning of any new long term bear market for stock index futures.

 

CURRENCY FUTURES

The U.S. dollar is higher, but did not make new highs for the move. 

In the longer term, lower prices are likely for the greenback, as interest rate differential expectations are likely to undermine the U.S. dollar.

The euro currency is a little lower today. However, longer term the currency of the euro zone will be underpinned by the belief that the European Central Bank will remove some of its accommodation later this year and may actually hike interest rates in the first quarter of next year.

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

The British pound fell after the European Union’s chief negotiator said a Brexit transition period wasn’t a given if disagreements with the U.K. continue.

In addition, there was some pressure on the pound on news that the U.K. trade deficit widened in December.

 

INTEREST RATE MARKET FUTURES

The thirty year Treasury bond futures tested yesterday’s lows, which were the lowest levels since April 2015.

There was some pressure on futures when Reserve Bank of Kansas City President Esther George said it's important to press forward with rate increases.

The probability of a fed funds rate increase at the FOMC’s March 21 policy meeting is 75%, which is unchanged from yesterday. 

The long trend for futures is lower, especially for the thirty year Treasury bond futures.

 

SUPPORT AND RESISTANCE

 

March 18   S&P 500

Support    2573.00       Resistance    2629.00

 

March 18   U.S. Dollar Index

Support    89.950         Resistance    90.450

 

March 18   Euro Currency

Support    1.22450       Resistance    1.23260

 

March 18   Japanese Yen

Support    .91540         Resistance    .92450

 

March 18   Canadian Dollar

Support    .78720         Resistance    .79810

 

March 18  Australian Dollar

Support    .7746           Resistance    .7839

 

March 18   Thirty Year Treasury Bonds

Support    143^12        Resistance    144^20

 

April 18   Gold

Support    1312.0         Resistance    1328.0

 

March 18   Copper

Support    3.0400         Resistance    3.0900

 

March 18   Crude Oil

Support    61.09           Resistance    61.23

 


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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