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Treasury Auctions Today

by Archer Financial Services | Oct 10, 2018

By Alan Bush | Senior Financial Economist at ADMIS   

STOCK INDEX FUTURES

U.S. producer prices, which is a measure of the prices businesses receive for their goods and services, increased a seasonally adjusted 0.2% in September from a month earlier and was in line with the median forecast. This is the first increase in headline inflation pressures in three months.

Excluding the often volatile food and energy categories, prices were up 0.2% in September from the previous month, which also matched economists' expectations. 

The October Atlanta Federal Reserve business inflation expectations report will be released at 9:00 central time. The September number was 2.2%.

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 euro currency is lower after Italy’s government said it would not backtrack on plans to increase deficit spending.

The British pound is higher due to reports that the U.K. and the E.U. were making progress towards a Brexit deal. 

The Canadian dollar and the Australian dollar, the “commodity currencies,” are lower following weaker crude oil prices. 

  

INTEREST RATE MARKET FUTURES

Futures are lower as it remains likely that the Federal Open Market Committee will increase interest rates in December. 

In addition, some of today’s pressure is linked to comments made late yesterday from New York Federal Reserve Bank President John Williams when he said he expects the Federal Reserve to return its target interest rate to neutral levels within "the next year or so."  

Also, supply is a bearish influence with the Treasury to auction three year and 10 year notes today.

Federal Reserve speakers today are Chicago Federal Reserve Bank President Charles Evans at 11:15 and Atlanta Federal Reserve Bank President Raphael Bostic at 5:00.

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 83%, which is unchanged from yesterday.

The long term trend for futures is lower, especially for the thirty year Treasury bond futures, 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    2872.00      Resistance    2893.00

 

December 18   U.S. Dollar Index

Support    95.210        Resistance    95.550

 

December 18   Euro Currency

Support    1.15370      Resistance    1.15970

 

December 18   Japanese Yen

Support    .88650        Resistance    .88990

 

December 18   Canadian Dollar

Support    .77110        Resistance    .77490

 

December 18   Australian Dollar

Support    .7083          Resistance    .7143

 

December 18   Thirty Year Treasury Bonds

Support    136^20       Resistance    137^26

 

December 18   Gold

Support    1186.0        Resistance    1198.0

 

December 18   Copper

Support    2.7800        Resistance    2.8250

 

November 18   Crude Oil

Support    74.38          Resistance    75.33


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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