By Alan Bush | Senior Financial Economist at ADMIS
Stock index futures declined yesterday as investors turned skeptical of the chances for a breakthrough in the U.S.-China trade talks.
However, stock index futures advanced in the overnight session when President Trump said he believed Chinese President Xi Jinping was being sincere at their meeting on trade and Beijing has been sending “strong signals” since then.
At 1:00 central time the Federal Open Market Committee will release its Beige Book on the economy. This book is produced approximately two weeks before the monetary policy meetings of the Federal Open Market Committee.
The stock index futures markets are closed today.
Currency futures markets have normal trading hours today.
The U.S. dollar weakened for a third day due to the recent decline in U.S. Treasury yields.
A less hawkish Federal Reserve is likely to put a cap on the greenback.
The euro currency is higher on better economic news. The euro zone November services PMI was 53.4, which compares to expectations of 53.1 and the euro zone November Composite PMI was 52.7 when 52.4 was predicted.
Euro zone October retail sales increased .3% on the month, which compares to estimates of a gain of .2%.
The British pound is higher in spite of news that growth in the U.K.'s services sector hit its lowest level since July 2016. The purchasing managers' index from IHS Markit/CIPS fell to 50.4 in November, which is down from 52.2 in October.
The interest rate futures markets are closed today.
Recent sharp gains for futures are a result of increasing indications of a slowing global economy and prospects of a less hawkish Federal Reserve in 2019.
Federal Reserve Chair Jerome Powell's testimony in Washington has been canceled.
U.S. Federal Reserve Bank Vice Chairman Randal Quarles will speak at 7:15 this evening.
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 78%, which compares to 85% 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 in the longer term, led by the thirty year Treasury bond futures.
December 18 U.S. Dollar Index
Support 96.630 Resistance 97.180
December 18 Euro Currency
Support 1.13210 Resistance 1.13880
December 18 Japanese Yen
Support .88410 Resistance .88880
December 18 Canadian Dollar
Support .75150 Resistance .75550
December 18 Australian Dollar
Support .7275 Resistance .7366
February 19 Gold
Support 1235.0 Resistance 1249.0
March 19 Copper
Support 2.7400 Resistance 2.7800
January 19 Crude Oil
Support 52.11 Resistance 54.03
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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