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Most Flight to Quality Vehicles Advance

by AFS Archer Financial Svcs | Jul 02, 2019

By Alan Bush | Senior Financial Economist at ADMIS   

STOCK INDEX FUTURES

After new record highs for the S&P 500 yesterday, stock index futures are lower today, as trade talk euphoria fades.

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.

CURRENCY FUTURES

The U.S. dollar is lower as optimism from a weekend trade truce between the U.S. and China wanes.

The euro currency advanced after a source at the European Central Bank, who asked not to be identified, said the ECB sees "no rush" for a rate cut when the central bank meets on July 25.

The source said the central bank is currently leaning toward easier credit at the following meeting in September when it will have updated economic forecasts.  

The British pound is lower after a report showed construction output fell at the steepest rate since April 2009.

The Australian dollar is higher after the Reserve Bank of Australia cut interest rates, as expected, but indicated a more balanced outlook. The quarter-point reduction took cash rates to an all-time low of 1%.
 

INTEREST RATE MARKET FUTURES

According to the National Bureau of Economic Research, the U.S. is officially in its longest expansion period, breaking the record of 120 months of economic growth that took place from March 1991 to March 2001.

U.S. Treasury yields fell after the Reserve Bank of Australia cut interest rates.

At 10:00 central time Cleveland Federal Reserve Bank President Loretta Mester will deliver a speech on the economic outlook at the European Economics and Financial Centre in London, England.

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 30-31 policy meeting. A second and possibly a third rate cut is anticipated by financial futures markets later this year.

In the longer term, higher prices are likely for futures, as most major central banks are likely to embark on a new round of accommodation.

SUPPORT AND RESISTANCE

September 19 S&P 500

Support    2957.00      Resistance    2980.00

September 19 U.S. Dollar Index

Support    96.110        Resistance    96.490

September 19 Euro Currency

Support    1.13350      Resistance    1.13970

September 19 Japanese Yen

Support    .92630        Resistance    .93070

September 19 Canadian Dollar

Support    .76170        Resistance    .76460

September 19 Australian Dollar

Support    .6965          Resistance    .7026

September 19 Thirty Year Treasury Bonds

Support    155^0         Resistance     155^26

August 19 Gold

Support    1384.0        Resistance     1402.0

September 19 Copper

Support    2.6550        Resistance     2.7050

August 19 Crude Oil

Support    58.13          Resistance     59.66

 

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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