header_img

Inflation Heats Up in Euro Zone

by Archer Financial Services | May 31, 2018

By Alan Bush | Senior Financial Economist at ADMIS   

STOCK INDEX FUTURES  

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.

 

CURRENCY FUTURES

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.

    

INTEREST RATE MARKET FUTURES

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.

 

SUPPORT AND RESISTANCE

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 alan.bush@admis.com. Thank you.

Would you like to open an account with us? Go to our interactive New Account application at Open an Account. It is fast, saves on postage and it’s green.

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.

Offers