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Trade Talk Optimism

by Archer Financial Services | Feb 20, 2019

By Alan Bush | Senior Financial Economist at ADMIS   

STOCK INDEX FUTURES

U.S. stock index futures firmed yesterday when President Donald Trump said trade talks with China were going well and suggested he was open to pushing off the deadline to complete negotiations. President Trump said March 1 was not a “magical” date.

Stock index futures in the U.S. are subdued today due to a few downbeat earnings reports.

Stock index futures have been performing better than the news would suggest since the lows were made in late December, which should be viewed as a sign of long term strength.

 

CURRENCY FUTURES

The British pound fell due to the ongoing political turmoil surrounding the Brexit situation.

Selling pressure in the pound was limited by news that British factory orders picked up this month after dipping in January. Also, output is expected to be solid, according to a survey from the Confederation of British Industry.

The Japanese yen declined on news that Japan recorded its biggest trade deficit in nearly five years in January.

The yen was pressured yesterday after Bank of Japan Governor Haruhiko Kuroda said the central bank was ready to increase stimulus measures if sharp yen gains hurt the economy.

The Canadian dollar and the Australian dollar, the “commodity currencies,” are likely to trend higher, as most industrial commodity prices work higher.

 

INTEREST RATE MARKET FUTURES

At 1:00 central time the Federal Open Market Committee will release the minutes from its January 30 policy meeting. The minutes of the previous FOMC meeting are reported three weeks after the meeting.

Financial futures markets are predicting an 87% probability that the fed funds rate will remain unchanged at the current level of 2.25%-2.50% this year. There is a 1% chance for a 25 basis point increase in 2019 and there is a 12% probability of a 25 basis point reduction this year.

The thirty year Treasury bond futures have remained in a broad trading range since the first week in January. A U.S.-China trade agreement, or strong hint of one, would be a catalyst to take futures lower.

 

SUPPORT AND RESISTANCE

March 19 S&P 500

Support    2768.00      Resistance    2790.00

March 19 U.S. Dollar Index

Support    96.160        Resistance    96.550

March 19 Euro Currency

Support    1.13440      Resistance    1.13910

March 19 Japanese Yen

Support    .90260        Resistance    .90670

March 19 Canadian Dollar

Support    .75670        Resistance    .75980

March 19 Australian Dollar

Support    .7140          Resistance    .7188

March 19 Thirty Year Treasury Bonds

Support    146^10       Resistance    147^8

April 19 Gold

Support    1339.0        Resistance    1355.0

March 19 Copper

Support    2.8650        Resistance    2.9000

April 19 Crude Oil

Support    55.55          Resistance    56.88


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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