By Alan Bush | Senior Financial Economist at ADMIS
U.S. stock index futures are higher after China today said it welcomed an invitation by the U.S. to hold a new round of trade talks, as Washington prepares to further escalate the U.S.-China trade war with tariffs on $200 billion worth of Chinese goods. It is unclear when these talks could take place.
The U.S. labor market continues to remain strong as initial weekly jobless claims remain near 49 year lows that were registered in the previous week.
Jobless claims fell 1,000 to 204,000 in the week ended September 8. The consensus forecast called for initial claims to be near 210,000.
U.S. consumer prices advanced for a fifth straight month in August, although the pace of annual increases slowed for the first time this year.
Consumer prices increased a seasonally adjusted 0.2% in August from the previous month, while excluding volatile food and energy components, prices increased 0.1%.
Economists had anticipated a 0.3% gain in August for the headline number and a 0.2% advance in the core inflation rate.
The still relatively low interest rate environment remains long term supportive to U.S. stock index futures.
The U.S. dollar is lower after the smaller than expected increase in the U.S. consumer price index was released.
The Governing Council of the European Central Bank left interest rates unchanged today and reaffirmed its plan to end bond purchases by the end of the year.
The central bank said the interest rate on its main refinancing operations and the interest rates on its marginal lending facility and the deposit facility will remain at 0.00%, 0.25% and negative 0.40%, respectively.
In addition, the Governing Council said in its policy statement that it expects key ECB interest rates to remain at current levels at least through the summer of 2019.
The British pound is higher after the Bank of England left interest rates on hold at 0.75% as expected, but warned about the "greater uncertainty" around the Brexit negotiations.
The Bank's Monetary Policy Committee voted 9-0 to leave rates unchanged, after a quarter of a percentage point increase last month took interest rates to the highest level since March 2009.
The Canadian dollar is higher in spite of news that the annual growth rate of Canada's new house price index slowed to 0.5% in July from 0.8% in June, which is the slowest since January of 2010.
Futures firmed on news that the U.S. consumer price index was smaller than estimated.
The Treasury will auction thirty year bonds today.
Atlanta Federal Reserve Bank President Raphael Bostic will speak at 11:30.
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%, 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.
September 18 S&P 500
Support 2884.00 Resistance 2905.00
September 18 U.S. Dollar Index
Support 94.370 Resistance 95.010
September 18 Euro Currency
Support 1.16040 Resistance 1.17060
September 18 Japanese Yen
Support .89530 Resistance .90000
September 18 Canadian Dollar
Support .76780 Resistance .77160
September 18 Australian Dollar
Support .7159 Resistance .7237
December 18 Thirty Year Treasury Bonds
Support 141^26 Resistance 142^24
December 18 Gold
Support 1206.0 Resistance 1221.0
December 18 Copper
Support 2.6700 Resistance 2.7250
October 18 Crude Oil
Support 69.01 Resistance 70.40
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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