By Alan Bush | Senior Financial Economist at ADMIS
U.S. stock index futures declined following weaker euro zone equity markets. Pressure on euro zone stock markets was linked to increasing political and economic tensions within the European Union.
Federal Reserve Chairman Jerome Powell will speak at the 60th Annual National Association for Business Economics meeting in Boston at 11:00 central time.
Despite of a variety of ongoing geopolitical issues the still relatively low interest rate environment is dominating and remains long term supportive to U.S. stock index futures.
The euro currency is lower after a senior lawmaker, Claudio Borghi, the economics spokesman of Italy’s ruling League party said most of the country’s problems would be resolved if it readopted a national currency. However, clarifying his comments later, Borghi said Italy’s government has no intention of leaving the euro.
As a result of the increasing political tensions within the euro zone, safe-haven buying came into the U.S. dollar, the Japanese yen and the Swiss franc.
Selling pressure on the euro was limited by news that inflation in the euro zone came in stronger than expected.
Euro zone August producer prices increased 0.3%, which compares to the anticipated gain of 0.2%.
The Reserve Bank of Australia kept interest rates unchanged, as expected, at a record low 1.5%, where it has been since the middle of 2016.
In light of the intensifying political and economic tensions in the euro zone, flight to quality longs were established.
According to the financial futures markets, the probability of a fed funds rate hike in December is 81%, which compares to 78% yesterday.
Federal Reserve Vice Chairman Randal Quarles will speak at 9:00 central time.
Flight to quality rallies often last for a short while and should be used as selling opportunities.
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 this year and in 2019.
December 18 S&P 500
Support 2915.00 Resistance 2935.00
December 18 U.S. Dollar Index
Support 94.800 Resistance 95.440
December 18 Euro Currency
Support 1.15650 Resistance 1.16550
December 18 Japanese Yen
Support .88110 Resistance .88550
December 18 Canadian Dollar
Support .77920 Resistance .78330
December 18 Australian Dollar
Support .7162 Resistance .7248
December 18 Thirty Year Treasury Bonds
Support 139^16 Resistance 140^18
December 18 Gold
Support 1190.0 Resistance 1212.0
December 18 Copper
Support 2.7550 Resistance 2.8450
November 18 Crude Oil
Support 75.11 Resistance 75.97
For more information about these markets, please contact Alan at 312.242.7911 or via email at email@example.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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