By Alan Bush | Senior Financial Economist at ADMIS
There were sharp declines in stock index futures when China quickly hit back against the Trump administration’s plans to impose tariffs on $50 billion in Chinese goods. China retaliated with a list of similar duties on U.S. imports, including soybeans, planes, automobiles, beef and chemicals.
It was recently reported that the Trump administration will unveil by Friday a list of advanced technology imports from China that could be subject to new U.S. tariffs.
There were some recovery gains on news that the March Automatic Data Processing employment change report showed its biggest increase three years, coming in up 241,000, which compares to the estimate of an increase of 185,000.
The 8:45 central time March PMI services index is expected to be 54.1.
The 9:00 February factory orders report is anticipated to show a 1.7% increase and the 9:00 March Institute for Supply Management nonmanufacturing index is estimated to be 59.
Political markets are always the most difficult to trade in any market, which warrants caution.
Ongoing trade issues will probably continue for a while, but will only temporarily pressure futures.
The euro currency is higher due to news of a pick-up in euro zone inflation in March, which keeps the European Central Bank on track with its plans to unwind its huge stimulus program in coming months.
Inflation was 1.4% annualized, which was in line with market expectations and up from 1.1% in February.
I continue to anticipate the double top resistance at the 1.26500 - 1.26580 area in the June euro currency to be taken out, although it may take some time.
In light of the increased trade tensions between the U.S. and China, flight to quality buying is coming into the Japanese yen.
Flight to quality buying is coming into the interest rate market futures in light of the increased trade tensions.
Federal Reserve speakers today are St. Louis Federal Reserve Bank President James Bullard at 8:30 and Cleveland Federal Reserve Bank President Loretta Mester at 10:00.
The probability of a fed funds rate hike from the Federal Open Market Committee at the June 13 meeting is 80%, which compares to 85% yesterday.
June 18 S&P 500
Support 2554.00 Resistance 2616.00
June 18 U.S. Dollar Index
Support 89.450 Resistance 89.930
June 18 Euro Currency
Support 1.23200 Resistance 1.23910
June 18 Japanese Yen
Support .94110 Resistance .94880
June 18 Canadian Dollar
Support .77850 Resistance .78440
June 18 Australian Dollar
Support .7661 Resistance .7725
June 18 Thirty Year Treasury Bonds
Support 145^20 Resistance 146^24
June 18 Gold
Support 1333.0 Resistance 1355.0
May 18 Copper
Support 2.9650 Resistance 3.0750
May 18 Crude Oil
Support 61.79 Resistance 63.89
For more information about these markets, please contact Alan at 312.242.7911 or via email at firstname.lastname@example.org. 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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