By Alan Bush | Senior Financial Economist at ADMIS
Traders are looking ahead to the upcoming G-20 meeting in Osaka, Japan on Friday and Saturday, where President Donald Trump and China’s President Xi are scheduled to hold trade talks.
The U.S. gross domestic product increased 3.1% the second quarter, which was as expected. The rate of growth in the first quarter was much stronger than the 2.2% pace in the fourth quarter of last year. Economists are predicting growth is slowing in the second quarter of this year.
Initial jobless claims increased 10,000 to 227,000 in the week ended June 22 when economists expected 219,000 new claims last week.
The 9:00 central time May pending home sales index is expected to be up .6% and the 10:00 June Kansas City Federal Reserve manufacturing index is anticipated to be 3.
My view remains that the global reflation scenario is on track and easier credit conditions from most of the world’s central banks, including the Federal Reserve, are coming and will be the dominant fundamental that supports stock index futures in the long term.
The euro currency is steady following mixed economic reports.
Euro zone manufacturers were at their most downbeat in nearly six years in June. An economic sentiment indicator fell to 103.3 from 105.2 in May, which is the lowest level since August 2016.
However, German consumer prices increased faster than expected in June. Consumer prices rose 0.3% on month in June and 1.6% on year, which is higher than economists’ expectations of a gain of 0.1% on month and 1.4% on year.
The Treasury will auction seven year notes today.
Financial futures markets are predicting there is almost a 100% probability that the Federal Open Market Committee will lower its fed funds rate by 25 basis points or more at its July 31 policy meeting. A July rate cut would be the first reduction in a decade. A second rate cut is likely later this year.
Higher prices are likely for futures as most major central banks are likely to embark on a new round of accommodation.
September 19 S&P 500
Support 2911.00 Resistance 2940.00
September 19 U.S. Dollar Index
Support 95.600 Resistance 95.97
September 19 Euro Currency
Support 1.14120 Resistance 1.14620
September 19 Japanese Yen
Support .92900 Resistance .93500
September 19 Canadian Dollar
Support .76170 Resistance .76400
September 19 Australian Dollar
Support .6995 Resistance .7027
September 19 Thirty Year Treasury Bonds
Support 154^12 Resistance 155^20
August 19 Gold
Support 1400.0 Resistance 1418.0
September 19 Copper
Support 2.6950 Resistance 2.7350
August 19 Crude Oil
Support 58.34 Resistance 59.55
For more information about these markets, please contact Alan at 312.242.7911 or via email at email@example.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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