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Trade Tensions Easing?

by Archer Financial Services | Apr 05, 2018

By Alan Bush | Senior Financial Economist at ADMIS   
 

STOCK INDEX FUTURES 

Stock index futures are higher and are building on the strong recovery in yesterday’s trade, as fears about a trade war between the U.S. and China were reduced on signs that the two countries were open to negotiations on tariffs.

There are reports that China and the U.S. left the door open for a negotiated solution to trade disputes.

The improvement in sentiment was helped yesterday when White House economic adviser Larry Kudlow said the U.S. measures were a form of trade negotiations and that President Trump’s tariffs on China are all proposals. 

Initial jobless claims increased last week, but they remain near multi-decade lows. Jobless claims increased by 24,000 to a seasonally adjusted 242,000 in the week ended March 31. Economists expected 225,000 new claims last week.

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 they will only temporarily pressure futures. 

  

CURRENCY FUTURES

The U.S. dollar firmed due to reports that the U.S. may negotiate a resolution to trade issues with China.

The British pound is lower after a report showed the U.K. service sector grew at the slowest rate in more than 18 months during March. A purchasing managers index for the service sector declined to 51.7 from 54.5 in February, which was weaker than the estimate of a decline to 54.0.

In addition, the pound was pressured by a report that showed U.K. car registrations in March plunged 15.7% from a year ago.

Flight to quality longs are being liquidated in the Japanese yen in light of the perceived easing of trade tensions between the U.S. and China.

 

INTEREST RATE MARKET FUTURES

Flight to quality longs are being liquidated due to the apparently easing global trade tensions.

Atlanta Federal Reserve Bank President Raphael Bostic will speak at 12:00 central time.

The probability of a fed funds rate hike from the Federal Open Market Committee at the June 13 meeting is 80%, which is unchanged from yesterday.

 

SUPPORT AND RESISTANCE

June 18   S&P 500

Support    2641.00       Resistance    2673.00

 

June 18   U.S. Dollar Index

Support    89.660         Resistance    90.190

 

June 18   Euro Currency

Support    1.22860       Resistance    1.23660

 

June 18   Japanese Yen

Support    .93670         Resistance    .94200

 

June 18   Canadian Dollar

Support    .78130         Resistance    .78660

 

June 18   Australian Dollar

Support    .7673           Resistance    .7732

 

June 18   Thirty Year Treasury Bonds

Support    144^20        Resistance    145^20

 

June 18   Gold

Support    1322.0         Resistance    1341.0

 

May 18   Copper

Support    3.0100         Resistance    3.0700

 

May 18   Crude Oil

Support    62.89           Resistance    63.93

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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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