By Alan Bush | Senior Financial Economist at ADMIS
Stock index futures firmed in the overnight trade due to an easing of political tensions in the euro zone.
However, pressure developed this morning by worries of a looming trade war with the European Union, as Washington is set to announce plans to impose tariffs on E.U. steel and aluminum imports as early as today.
Initial jobless claims fell 13,000 to a seasonally adjusted 221,000 in the week ended May 26. Economists had forecast 225,000 new applications for jobless benefits last week.
Personal income increased .3% in April, as expected, and personal consumption expenditures increased .6% in April from the prior month. Economists predicted a .4% increase in spending.
The 8:45 central time May Chicago PMI is expected to be 58.4 and the 9:00 April pending home sales index is anticipated to be up .4%.
In spite of the newest geopolitical risks, the political situation in Italy and escalating trade tensions between the U.S. and the E.U., in the longer term, traders will likely gradually shift their focus of attention more toward the still overall accommodative global interest rate policies and away from a variety of geopolitical worries.
The U.S. dollar is lower and the euro currency is higher as the political tensions in Italy eased.
The euro rallied as Italian populist parties made last-ditch efforts to form a government and avert new elections.
The euro was also supported by news that consumer prices in the 19 countries that use the euro were 1.9% higher than in May 2017, which was stronger than the 1.6% gain that was expected by economists.
The British pound is higher on news that U.K. consumer credit rebounded in April.
The Fed’s “Beige Book” on the economy, which was released yesterday afternoon, was generally upbeat on the economy. This book is produced approximately two weeks before the monetary policy meetings of the Federal Open Market Committee.
Federal Reserve speakers today are Atlanta Federal Reserve Bank President Raphael Bostic at 11:30, Federal Reserve Governor Lael Brainard at 12:00 and Dallas Federal Reserve Bank President Robert Kaplan at 7:30 this evening.
The probability of a fed funds rate hike from the Federal Open Market Committee at the June 13 meeting is 91%, which compares to 84% yesterday.
Although geopolitical events will inevitably come up from time to time, which will produce short periods of flight to quality buying, the main trend for futures is lower.
June 18 S&P 500
Support 2713.00 Resistance 2730.00
June 18 U.S. Dollar Index
Support 93.590 Resistance 94.180
June 18 Euro Currency
Support 1.16500 Resistance 1.17450
June 18 Japanese Yen
Support .91770 Resistance .92310
June 18 Canadian Dollar
Support .77200 Resistance .78110
June 18 Australian Dollar
Support .7546 Resistance .7599
June 18 Thirty Year Treasury Bonds
Support 144^20 Resistance 145^24
June 18 Gold
Support 1295.0 Resistance 1308.0
July 18 Copper
Support 3.0400 Resistance 3.0950
July 18 Crude Oil
Support 66.45 Resistance 68.39
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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