header_img

Global Trade Tensions Dominate

by Archer Financial Services | Sep 05, 2018

By Alan Bush | Senior Financial Economist at ADMIS   

STOCK INDEX FUTURES

U.S. stock index futures declined as trade tensions accelerate as a result of expectations that the U.S. might escalate tariffs on China this week.

The U.S. - Canadian trade talks will resume today.    

Although U.S. equity markets are lower today, they continue to outperform China’s stock markets.

Today, China’s Shanghai Composite index fell 1.7% after a private gauge of China's service sector slowed in August.  

The still relatively low global interest rate environment and the mostly stronger than estimated U.S. corporate earnings reports remain long term supportive to U.S. stock index futures.

 

CURRENCY FUTURES

The U.S. dollar was firm in the overnight trade due to concerns about a possible escalating trade conflict between the U.S. and China, which prompted investors to sell emerging market currencies.  However, the greenback came under pressure more recently.

The euro currency is higher in spite of news that euro zone retail sales dropped 0.2% on a month to month basis in July leaving the annual rate at 1.1%, which is down 1.5% annualized in June.

The British pound is higher on news that the U.K. August services PMI beat forecasts, increasing to 54.3. The median forecast had been for a more modest gain to 54.0. 

The Bank of Canada is expected to keep its benchmark interest rate unchanged at its policy meeting today.

The Australian dollar is higher due to a report that showed Australia's economy grew solidly in the second quarter.  

 

INTEREST RATE MARKET FUTURES

Futures are only mixed in spite of a possible escalating trade conflict between the U.S. and China.

New York Federal Reserve Bank President John Williams will speak at 11:30, 2:00 and also at 4:30.

Minneapolis Federal Reserve Bank President Neel Kashkari will speak at 3:00 and Atlanta Federal Reserve Bank President Raphael Bostic will speak at 5:30.

According to financial futures markets, the probability of a fed funds rate increase at the Federal Open Market Committee’s September 26 meeting is close to 100%, which compares to 98% yesterday.

In addition, another fed funds rate hike is likely in December.

 

SUPPORT AND RESISTANCE

September 18   S&P 500

Support    2882.00      Resistance    2904.00

 

September 18   U.S. Dollar Index

Support    94.870        Resistance    95.650

 

September 18   Euro Currency

Support    1.15460      Resistance    1.16610

 

September 18   Japanese Yen

Support    .89510        Resistance    .89930

 

September 18   Canadian Dollar

Support    .75670        Resistance    .76070

 

September 18   Australian Dollar

Support    .7140          Resistance    .7231

 

December 18   Thirty Year Treasury Bonds

Support    142^26       Resistance    143^20

 

December 18   Gold

Support    1194.0        Resistance    1210.0

 

December 18   Copper

Support    2.5900        Resistance    2.6300

 

October 18   Crude Oil

Support    68.56          Resistance    69.79


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