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FOMC on Wednesday

by Archer Financial Services | Jan 28, 2019

By Alan Bush | Senior Financial Economist at ADMIS   

STOCK INDEX FUTURES

Stock index futures are lower due to several weak corporate earnings reports.

Traders are awaiting news from the U.S.-China talks on Tuesday and Wednesday to see if the world's largest economies can reach a compromise agreement on trade.  

The Chicago Federal Reserve National Activity Index increased slightly.   The index was .27 in December, which compares with the downwardly revised .21 in November.  The median estimate was .15.

The 9:30 central time January Dallas Federal Reserve manufacturing index is expected to be negative 4.6.

Approximately 72% of companies in the S&P 500 have reported results that were above analysts’ expectations, compared with an average beat of 64%, according to data from Refinitiv.      

 

CURRENCY FUTURES

Currency traders are focusing on Wednesday's Federal Open Market Committee meeting when policymakers are expected to signal a pause in their tightening cycle and acknowledge potential growing risks to the economy.

The euro firmed on news that euro zone lending growth jumped in December, according to the European Central Bank.

The British parliament is scheduled to vote on U.K. Prime Minister Theresa May's “Plan B” for Brexit to parliament tomorrow after policymakers earlier this month voted down her initial plan with the European Union.

The U.K. is scheduled to leave the European Union on March 29.

 

INTEREST RATE MARKET FUTURES

The FOMC will release its policy statement on Wednesday. No major changes are expected. Traders will focus on Federal Reserve Chairman Jerome Powell's press conference. Federal Reserve officials recently indicated they will be patient in raising interest rates.

The Treasury will auction two and five year notes today.

Financial futures markets are predicting a 66% probability that the fed funds rate will remain unchanged at the current level of 2.25%-2.50% this year.

There is a 30% chance of an increase in the fed funds rate by 25 basis points, and there is a 4% probability of a 25 basis point rate cut in 2019.

 

SUPPORT AND RESISTANCE

March 19 S&P 500

Support    2621.00      Resistance    2666.00

 

March 19 U.S. Dollar Index

Support    95.210        Resistance    95.660

 

March 19 Euro Currency

Support    1.14340      Resistance    1.14890

 

March 19 Japanese Yen

Support    .91550        Resistance    .91990

 

March 19 Canadian Dollar

Support    .75320        Resistance    .75880

 

March 19 Australian Dollar

Support    .7163          Resistance    .7223

 

March 19 Thirty Year Treasury Bonds

Support    144^28       Resistance    145^16

 

February 19 Gold

Support    1294.0        Resistance    1306.0

 

March 19 Copper

Support    2.6800        Resistance    2.7500

 

March 19 Crude Oil

Support    51.67          Resistance    53.76


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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