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Reports of China Support for the Yuan

by Archer Financial Services | Jul 03, 2018

By Alan Bush | Senior Financial Economist at ADMIS   

STOCK INDEX FUTURES

Stock index futures are higher after China’s equities were supported by speculation that the country's central bank entered the foreign exchange market in order to support the slumping yuan.

The benchmark Shanghai index firmed today, although it entered bear market territory last week and was trading near its lowest level in over two years.

The 9:00 central time May factory orders report is expected to be unchanged.

Overall, U.S. stock index futures are holding up relatively well in spite of the ongoing global trade uncertainties.

 

CURRENCY FUTURES

The euro currency is higher on news that the euro zone’s producer price index in May was up .8% from April and up 3%, year-on-year, which were a little higher than expected.

The currency of the euro zone was also supported by news that German Chancellor Merkel avoided a political crisis for now by reaching an agreement with other German lawmakers regarding immigration laws.

The euro is higher in spite of news that retail sales across the euro zone remained subdued in May.

The British pound is higher after a report showed U.K. construction output growth reached a seven month high in June.

The Australian dollar is higher after the Reserve Bank of Australia left its key interest rate unchanged at a record low of 1.5%, where it has been since August 2016, as expected.

 

INTEREST RATE MARKET FUTURES

Some flight to quality longs were liquidated in the overnight trade.

There are no Federal Reserve speakers scheduled for today.

The probability of a fed funds rate hike at the Federal Open Market Committee’s September 26 meeting is 77%, which compares to 70% yesterday.

The longer term trend for futures is lower.

 

SUPPORT AND RESISTANCE

September 18   S&P 500

Support    2716.00       Resistance    2745.00

 

September 18   U.S. Dollar Index

Support    94.210         Resistance    94.820

 

September 18   Euro Currency

Support    1.16578       Resistance    1.17480

 

September 18   Japanese Yen

Support    .90410         Resistance    .90960

 

September 18   Canadian Dollar

Support    .75770         Resistance    .76310

 

September 18   Australian Dollar

Support    .7310           Resistance    .7415

 

September 18   Thirty Year Treasury Bonds

Support    144^12        Resistance    145^0

 

August 18   Gold

Support    1236.0         Resistance    1256.0

 

September 18   Copper

Support    2.9200         Resistance    2.9750

 

August 18   Crude Oil

Support    73.75           Resistance    75.37


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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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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