By Alan Bush | Senior Financial Economist at ADMIS
U.S. stock index futures declined as investors turned skeptical of the chances of a breakthrough in the U.S.-China trade talks.
There are no major economic reports scheduled for today.
A less hawkish FOMC has long term bullish implications for stock index futures.
The U.S. dollar continued to weaken due to the decline in U.S. Treasury yields, while the euro currency rallied above $1.14.
Also, a less hawkish Federal Reserve is likely to put a cap on the greenback.
The trade linked currencies such as the Australian dollar and the Japanese yen advanced.
The Swiss franc is higher in spite of news that the Swiss consumer price index in November fell .3%.
The Australian dollar continued to advance against the U.S. dollar after the Washington and Beijing deal for a ceasefire in their trade war encouraged investors to sell the U.S. dollar and buy riskier assets.
The Reserve Bank of Australia left interest rates on hold at its policy meeting today. The official cash rate was left unchanged at a record low 1.5% where it has been since the middle of 2016. In addition, the RBA continued to indicate that it has no near term plans to raise interest rates.
Increasing indications of a slowing global economy continue to support the interest rate futures markets.
New York Federal Reserve Bank President John Williams will speak at 9:00 central time.
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 is unchanged from yesterday.
Financial futures markets suggest the FOMC will increase its fed funds rate only one time in 2019 with a 40% probability of a second increase.
I expect the interest rate futures market will likely trend higher longer term, led by the thirty year Treasury bond futures.
December 18 S&P 500
Support 2765.00 Resistance 2795.00
December 18 U.S. Dollar Index
Support 96.210 Resistance 96.930
December 18 Euro Currency
Support 1.13550 Resistance 1.1434
December 18 Japanese Yen
Support .88030 Resistance .88880
December 18 Canadian Dollar
Support .75690 Resistance .76050
December 18 Australian Dollar
Support .7345 Resistance .7404
March 19 Thirty Year Treasury Bonds
Support 140^24 Resistance 141^30
February 19 Gold
Support 1233.0 Resistance 1253.0
March 19 Copper
Support 2.7900 Resistance 2.8350
January 19 Crude Oil
Support 52.95 Resistance 54.66
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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