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U.S. Dollar Higher

by Archer Financial Services | May 08, 2018

By Alan Bush | Senior Financial Economist at ADMIS   

STOCK INDEX FUTURES

The National Federation of Independent Business said its small business confidence index edged up .1 percentage points to 104.8 in April to near record highs.  

The Labor Department's 9:00 central time March Job Openings and Labor Turnover Survey (JOLTS) report, which tracks the monthly change in job openings and offers rates on hiring and quits is expected to be 6.1 million.

President Donald Trump said he will discuss trade issues with Chinese President Xi Jinping this morning.

Also next week, China’s top economic official, Vice Premier Liu He, is scheduled to visit Washington to resume negotiations. 

Last week, the seven member U.S. delegation returned to Washington and briefed President Trump on their meeting with their Chinese counterparts.

At 1:00 President Trump is expected to make a statement on whether to withdraw from the Iran nuclear deal.

In the longer term, traders will probably gradually shift their focus of attention more toward corporate earnings and the still overall accommodative global interest rate policies and away from a variety of geopolitical worries, including global trade tensions.

 

CURRENCY FUTURES

The U.S. dollar continues to advance, as traders focus on the very likely increase in the fed funds rate from the Federal Open Market Committee at its June policy meeting.

The euro currency is lower due to recent reports that suggest Europe’s largest economy has slowed following strong growth in the fourth quarter of 2017.  

The European Central Bank will probably not be in a position to hike interest rates until possibly 2019.

In addition, recent economic reports from the U.K. suggest the Bank of England may not be able to increase its key interest rate until much later this year.

The Canadian dollar and the Australian dollar are lower due to weaker crude oil prices.

There was some additional pressure on the Canadian dollar on news that housing starts in Canada fell 4.9% in April from March. 

 

INTEREST RATE MARKET FUTURES

Federal Reserve Chair Jerome Powell said interest rate hikes should not upend the global economy. In addition, Powell said even though the Fed has raised the benchmark rate six times since December 2015, U.S. financial conditions have grown looser. 

The Treasury will auction three year notes today.

The FOMC remains on track to deliver its second rate hike of the year when it meets next month.

The probability of a fed funds rate increase from the FOMC at the June 13 meeting is almost 100%, which is unchanged from yesterday.  

I am still expecting only two more rate hikes this year from the Federal Reserve; one in June and another in December.

 

SUPPORT AND RESISTANCE

 

June 18   S&P 500

Support    2657.00       Resistance    2675.00

 

June 18   U.S. Dollar Index

Support    92.430         Resistance    93.110

 

June 18   Euro Currency

Support    1.18770       Resistance    1.97780

 

June 18   Japanese Yen

Support    .91650         Resistance    .92180

 

June 18   Canadian Dollar

Support    .77010         Resistance    .77870

 

June 18   Australian Dollar

Support    .7433           Resistance    .7535

 

June 18   Thirty Year Treasury Bonds

Support    143^0          Resistance    143^28

 

June 18   Gold

Support    1304.0         Resistance    1321.0

 

July 18   Copper

Support    3.0300         Resistance    3.1000

 

June 18   Crude Oil

Support    69.55           Resistance    70.45


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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