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Treasury Yields at Four Year Highs

by Archer Financial Services | Oct 04, 2018

By Alan Bush | Senior Financial Economist at ADMIS   
 

STOCK INDEX FUTURES

U.S. stock index futures declined, as U.S. Treasury yields increased to their highest levels since the middle of 2011.

Initial jobless claims fell 8,000 to a seasonally adjusted 207,000 in the week ended September 29.  Economists had expected 215,000 new claims last week. 

The 9:00 central time August factory orders report is expected to show an increase of 2.1%.

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.

 

CURRENCY FUTURES

The U.S. dollar is higher in response to rising U.S. interest rates.

Reduced tensions between the European Union and Italy limited declines in the euro currency.

Lower crude oil prices pressured the “commodity currencies,” the Canadian dollar and the Australian dollar.

There was additional selling in the Australian dollar on news that Australian residential building approvals tumbled 9.4% in August after a 4.6% decline in July.

 

INTEREST RATE MARKET FUTURES

Today the thirty year Treasury bond futures fell to the lowest level since August 2014.

Much of the selling in the interest rate future markets yesterday and today is due to comments from Federal Reserve Chairman Jerome Powell on Wednesday when he said the central bank has a ways to go before it gets interest rates to a level where they are neither restrictive nor accommodative.

Also, flight to quality longs were liquidated due to lessened political and economic tensions within the European Union.

According to the financial futures markets, the probability of a fed funds rate hike at the Federal Open Market Committee’s December 19 policy meeting is 85%, which compares to 82% yesterday.

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.

 

SUPPORT AND RESISTANCE

December 18   S&P 500

Support    2911.00      Resistance    2931.00

 

December 18   U.S. Dollar Index

Support    95.310        Resistance    95.850

 

December 18   Euro Currency

Support    1.15170      Resistance    1.15920

 

December 18   Japanese Yen

Support    .87640        Resistance    .88210

 

December 18   Canadian Dollar

Support    .77620        Resistance    .77920

 

December 18   Australian Dollar

Support    .7064          Resistance    .7124

 

December 18   Thirty Year Treasury Bonds

Support    137^4         Resistance    138^12

 

December 18   Gold

Support    1198.0        Resistance    1213.0

 

December 18   Copper

Support    2.8100        Resistance    2.8700

 

November 18   Crude Oil

Support    75.61          Resistance    76.58

 

 

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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.

 


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.

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