By Alan Bush | Senior Financial Economist at ADMIS
Stock index futures advanced with shares of energy companies getting a boost from a rally in crude oil after President Donald Trump pulled the U.S. out of a nuclear deal with Iran.
U.S. producer prices edged only slightly higher last month. The Labor Department said the producer price index increased a seasonally adjusted .1% in April from a month earlier. Economists had forecast a .2% increase.
Next week, China’s top economic official, Vice Premier Liu He, is scheduled to visit Washington to resume trade negotiations.
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 and now the situation between the U.S. and Iran.
The U.S. dollar made new highs for the move in the overnight trade, although it is lower now.
The euro currency is higher even though the European Central Bank will probably not be in a position to hike interest rates until possibly 2019.
The British pound is higher in spite of declining probabilities of a near term increase in U.K. interest rates. Financial futures markets are predicting there is only a 10% probability that the Bank of England will hike its key lending rate at its regularly scheduled policy meeting tomorrow.
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 Japanese yen is lower despite a report that real wages in Japan in March were up .8% on the year compared to -.8% in February.
The Canadian dollar and the Australian dollar are higher due to the sharp increase in crude oil prices.
The Canadian dollar was also supported by news that building permits in Canada increased 3.1% in March from February.
Oddly enough there was no flight to quality buying in Treasury futures in spite of yesterday’s news that President Donald Trump pulled the U.S. out of a nuclear agreement with Iran.
The Treasury will auction $25 billion in 10 year notes today.
At 12:15 central time Atlanta Federal Reserve Bank President Raphael Bostic to speak at the World Affairs Council in Jacksonville, Florida.
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 anticipating only two more rate increases this year from the Federal Reserve; one in June and another in December.
June 18 S&P 500
Support 2663.00 Resistance 2686.00
June 18 U.S. Dollar Index
Support 92.550 Resistance 93.300
June 18 Euro Currency
Support 1.18500 Resistance 1.19330
June 18 Japanese Yen
Support .91210 Resistance .92050
June 18 Canadian Dollar
Support .77010 Resistance .77840
June 18 Australian Dollar
Support .7403 Resistance .7477
June 18 Thirty Year Treasury Bonds
Support 142^4 Resistance 143^12
June 18 Gold
Support 1304.0 Resistance 1321.0
July 18 Copper
Support 3.0350 Resistance 3.0700
June 18 Crude Oil
Support 69.76 Resistance 71.55
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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