By Alan Bush | Senior Financial Economist at ADMIS
Stock index futures are sharply higher, following mostly stronger equity prices in Europe.
European stock markets were underpinned by news that Italy and the European Union signaled a willingness to compromise on the budget deficit target.
In addition, there is a more optimistic feeling that the U.S. and China will make progress in upcoming trade talks.
President Donald Trump and Chinese President Xi Jinping are expected to hold trade talks at the G-20 meeting in Buenos Aires on November 30.
The October Chicago Federal Reserve national activity index was 24, which compares to the estimate of 20.
The 9:30 central time November Dallas Federal Reserve manufacturing survey is expected to be 28.6.
The euro currency advanced on hopes for a compromise in the impasse over Italy's budget deficit when Italy’s Deputy Prime Minister Matteo Salvini indicated he may be willing to review the fiscal plan for 2019.
The apparent progress followed a weekend meeting in Brussels between Italian Prime Minister Giuseppe Conte and European Commission President Jean-Claude Juncker.
Italian media reported that the deficit could be slashed from 2.4% to 2.2% of GDP. However, government sources suggested the deficit could be reduced to as low as 2%.
The euro is higher in spite of news that German business sentiment deteriorated for the third straight month in November.
The British pound firmed after Sunday's Brexit agreement, but the currency's gains were limited by doubts about Prime Minister Theresa May getting the deal through a divided parliament.
Last week the thirty year Treasury bond futures advanced to a seven week high.
Futures are lower today as flight to quality longs are liquidated in light of higher stock index futures.
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 76%.
If I am correct in my belief that the Federal Open Market Committee will increase its fed funds rate no more than two times next year, the thirty year Treasury bond futures will likely trend higher.
December 18 S&P 500
Support 2627.00 Resistance 2670.00
December 18 U.S. Dollar Index
Support 96.450 Resistance 96.980
December 18 Euro Currency
Support 1.13350 Resistance 1.14110
December 18 Japanese Yen
Support .88260 Resistance .88850
December 18 Canadian Dollar
Support .75550 Resistance .75980
December 18 Australian Dollar
Support .7222 Resistance .7288
December 18 Thirty Year Treasury Bonds
Support 139^16 Resistance 140^8
December 18 Gold
Support 1219.0 Resistance 1232.0
December 18 Copper
Support 2.7400 Resistance 2.7950
January 19 Crude Oil
Support 49.89 Resistance 52.13
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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