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30 Year Treasury Bond Futures Trade Higher

by Archer Financial Services | Jul 08, 2019

By Alan Bush | Senior Financial Economist at ADMIS   

STOCK INDEX FUTURES

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.

CURRENCY FUTURES

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.

INTEREST RATE MARKET FUTURES 

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.

SUPPORT AND RESISTANCE

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


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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