By Alan Bush | Senior Financial Economist at ADMIS
S&P 500 futures advanced to another record high on Friday, but backed away after strong U.S. job gains tempered expectations that the Federal Open Market Committee will deliver a large interest rate cut.
The 2:00 central time May consumer credit report is expected to show a $17 billion increase.
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 U.S. dollar index is near three-week highs after gains on Friday, in light of last week’s strong U.S. jobs data that reduced expectations for a sharp Federal Reserve interest rate cut.
The euro currency is a little higher after German industrial production edged higher in May, as expected. Total industrial output increased 0.3% in May from the previous month, which was in line with economists' forecasts.
The British pound hit a six-month low on Friday after weak economic data and on increased expectations that the Bank of England will lower interest rates next year.
The Japanese yen is lower on news that Japan’s May core machinery orders declined 7.8% on the month when down 4.5% was anticipated.
The 30 year Treasury bond futures advanced to the highest level since October 2017 on Friday, but fell after the strong U.S. employment data was released.
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 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.
September 19 S&P 500
Support 2973.00 Resistance 2996.00
September 19 U.S. Dollar Index
Support 96.670 Resistance 96.980
September 19 Euro Currency
Support 1.12680 Resistance 1.13030
September 19 Japanese Yen
Support .92500 Resistance .92900
September 19 Canadian Dollar
Support .76480 Resistance .76780
September 19 Australian Dollar
Support .6986 Resistance .7016
September 19 Thirty Year Treasury Bonds
Support 154^28 Resistance 155^26
August 19 Gold
Support 1392.0 Resistance 1414.0
September 19 Copper
Support 2.6500 Resistance 2.6900
August 19 Crude Oil
Support 57.21 Resistance 58.03
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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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This is not a solicitation of any order to buy or sell, but merely a collection of information related to Archer Financial services and commodities trading provided by Archer Financial services. Any statement of facts herein contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor do they purport to be complete. No responsibility is assumed with respect to any such element, nor with respect to any expression of opinion herein contained.
The risk of loss in trading futures and options on futures can be substantial. Each investor must carefully consider whether this type of investment is appropriate for them. Past performance is not necessarily indicative of future results.