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Interest Rate Market Futures Underperforming the News

by Archer Financial Services | Sep 11, 2018

By Alan Bush | Senior Financial Economist at ADMIS   

STOCK INDEX FUTURES

U.S. stock index futures are lower due to ongoing concerns over the trade dispute between Washington and Beijing.

However, pressure on stock index futures was limited by news that U.S. small business optimism soared to a record in August, according to a survey by the National Federation of Independent Business. The NFIB said the record number was due to the tax cuts and deregulation efforts from the White House, which led to more sales, hiring and investment.

The NFIB Small Business Optimism Index jumped to 108.8 last month and above the previous record high of 108 in 1983 under the Reagan administration. The August number was up from the 107.9 reading that was reported in July.

The 9:00 central time July Job Openings and Labor Turnover Survey (JOLTS) is anticipated to be 6.67 million and the 9:00 July wholesale trade report is estimated to show an increase of .1%.   

The still relatively low interest rate environment remains long term supportive to U.S. stock index futures.

 

CURRENCY FUTURES

The euro currency is lower in spite of news that German economic expectations improved in September.

German financial analysts and institutional investors raised their economic outlook for Europe's largest economy in September, according to a monthly survey by the ZEW think tank.

The ZEW's measure of economic expectations increased for the second consecutive month to minus 10.6 points from minus 13.7 points in August. This compares to economists' forecasts of minus 12.9.

The British pound temporarily advanced when the E.U.'s chief Brexit negotiator said it is “realistic” and “possible” to get a Brexit deal by start of November.

 

INTEREST RATE MARKET FUTURES

The Treasury will auction three year notes today.

According to financial futures markets, the probability of a fed funds rate increase at the Federal Open Market Committee’s September 26 meeting is 98% and the probability of another fed funds rate hike in December is 79%.

The long term trend for futures is lower as the U.S. economy remains strong and the FOMC will likely continue on its tightening path.

 

SUPPORT AND RESISTANCE

September 18   S&P 500

Support    2866.00      Resistance    2889.00

 

September 18   U.S. Dollar Index

Support    94.840        Resistance    95.400

 

September 18   Euro Currency

Support    1.15680      Resistance    1.16550

 

September 18   Japanese Yen

Support    .89600        Resistance    .90110

 

September 18   Canadian Dollar

Support    .75850        Resistance    .76210

 

September 18   Australian Dollar

Support    .7082          Resistance    .7136

 

December 18   Thirty Year Treasury Bonds

Support    142^0         Resistance    142^28

 

December 18   Gold

Support    1190.0        Resistance    1206.0

 

December 18   Copper

Support    2.5800        Resistance    2.6650

 

October 18   Crude Oil

Support    67.25          Resistance    68.13


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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