By Alan Bush | Senior Financial Economist at ADMIS
Stock index futures firmed in the overnight trade as Italy’s political crisis subsided.
Stock index futures advanced to new highs for the day following a strong monthly jobs report in the U.S.
U.S. nonfarm payrolls increased a seasonally adjusted 223,000 in May, which compares to expectations of a gain of 189,000. The data was above the 178,000 positions that the Automatic Data Processing report indicated on Wednesday.
The jobless rate fell from 3.9% to 3.8%, an 18 year low, which compares to the consensus forecast for it to remain unchanged.
The 8:45 central time May PMI manufacturing index is expected to be 56.6.
There are two 9:00 reports. The May Institute for Supply Management manufacturing index is anticipated to be 58.5 and the April construction spending report is estimated to show a .8% increase.
In spite of a variety of geopolitical risks, traders appear to be gradually shift their focus of attention more toward the still bullish overall accommodative global interest rate policies and away from the geopolitical worries.
The U.S. dollar is lower and the euro currency is higher as the political tensions in Italy eased. The greenback remained firm after the U.S. employment report was released.
The euro currency is lower even though investor worries about euro zone stability appeared to ease after two large anti-establishment parties in Italy, the Five Star party and the League struck a deal on a coalition government, which decreased chances of new elections in Italy.
Lower crude oil prices and strong U.S. economic data pressured the “commodity currencies,” the Canadian dollar and the Australian dollar.
Flight to quality longs were liquidated in light of a better tone to the political situation in Italy.
There was addition pressure on futures when the stronger than expected employment numbers were reported.
The probability of a fed funds rate hike from the Federal Open Market Committee at the June 13 meeting is 94%, which compares to 91% 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 2704.00 Resistance 2730.00
June 18 U.S. Dollar Index
Support 93.770 Resistance 94.400
June 18 Euro Currency
Support 1.16530 Resistance 1.17370
June 18 Japanese Yen
Support .91140 Resistance .92130
June 18 Canadian Dollar
Support .76810 Resistance .77450
June 18 Australian Dollar
Support .7504 Resistance .7583
September 18 Thirty Year Treasury Bonds
Support 143^6 Resistance 144^20
August 18 Gold
Support 1291.0 Resistance 1308.0
July 18 Copper
Support 3.0500 Resistance 3.0950
July 18 Crude Oil
Support 66.03 Resistance 67.55
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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