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Stock Index Futures Partially Recover in the Overnight Session

by Archer Financial Services | Dec 05, 2018

By Alan Bush | Senior Financial Economist at ADMIS   

STOCK INDEX FUTURES

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

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.

  

INTEREST RATE MARKET FUTURES

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.

 

SUPPORT AND RESISTANCE

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 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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