By Alan Bush | Senior Financial Economist at ADMIS
Stock index futures advanced in spite of news that China cut its growth target for 2019 to a 30 year low. However, there is growing optimism that the U.S. and China will reach a trade agreement later this month, possibly at a summit around March 27, given the progress in talks between the two countries.
The 8:45 central time February PMI services index is expected to be 56.2.
Two 9:00 reports are scheduled. The December new home sales report is anticipated to show 590,000 and the February Institute for Supply Management non-manufacturing index is estimated to be 57.2.
Stock index futures have been performing better than the news would suggest with the S&P 500 advancing approximately 20% since late December.
The U.S. dollar firmed as investors search for higher yields, as foreign major central banks have turned more cautious about increasing interest rates.
The European Central Bank will hold its regularly scheduled policy meeting on Thursday. It is anticipated that ECB President Mario Draghi will deliver dovish commentary.
The British pound is lower in spite of data that showed the U.K. service sector expanded more than expected in February. The U.K. services PMI rose to 51.3 in February when economists had forecast 50.0.
Futures are lower even though Boston Federal Reserve President Eric Rosengren said he supported a “patient” policy approach that could last for “several” meetings of the Fed’s Federal Open Market Committee.
Financial futures markets are predicting a 90% probability that the fed funds rate will remain unchanged at the current level of 2.25%-2.50% this year. There is a 6% chance for a 25 basis point increase and there is a 4% probability of a decline in 2019.
The thirty year Treasury bond futures are testing the bottom of a broad trading range that started in the first week in January.
A U.S.-China trade agreement, or strong hint of one, would be a catalyst to take futures lower.
March 19 S&P 500
Support 2781.00 Resistance 2804.00
March 19 U.S. Dollar Index
Support 96.470 Resistance 96.770
March 19 Euro Currency
Support 1.13230 Resistance 1.13620
March 19 Japanese Yen
Support .89290 Resistance .89630
March 19 Canadian Dollar
Support .74850 Resistance .75220
March 19 Australian Dollar
Support .7071 Resistance .7107
June 19 Thirty Year Treasury Bonds
Support 143^18 Resistance 144^16
April 19 Gold
Support 1283.0 Resistance 1296.0
May 19 Copper
Support 2.9050 Resistance 2.9600
April 19 Crude Oil
Support 55.93 Resistance 57.55
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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