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U.S. Dollar Index at Three-Week High

by Archer Financial Services | Jul 09, 2019

By Alan Bush | Senior Financial Economist at ADMIS   

STOCK INDEX FUTURES

U.S. stock futures fell as investors worry about prospects of weakening earnings from the continuing trade dispute between the U.S. and China.

The June National Federation of Independent Business Small Business Optimism Index was 103.3, which compares to expectations of 104. The index was 105.0 in May.

The 9:00 central time May Job Openings and Labor Turnover Survey (JOLTS) is anticipated to be 7.4 million.

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 at a three-week high due to the belief that the Federal Open Market Committee may be slightly less aggressive in lowering its fed funds rate this year in light of last Friday’s strong U.S. jobs data.

The euro currency is a little lower due to concerns about the banking industry in the euro zone.

The British pound hit a six-month low, as worries remain about the British economy, Brexit uncertainties and expectations that the Bank of England will lower interest rates next year.

The Canadian dollar is lower in spite of news that Canadian housing starts surged in June to their highest level in a year.
 

INTEREST RATE MARKET FUTURES

Federal Reserve speakers today are St. Louis Federal Reserve Bank President James Bullard at 9:00, Atlanta Federal Reserve Bank President Raphael Bostic at 12:00 and Federal Reserve Board of Governors Vice Chairman for Supervision Randal Quarles at 1:00.

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.
 

GOLD

I saw three bearish articles on gold today, which suggests we have seen enough of a correction in this bull market for gold.

I will be out of the office on Wednesday, July 10.
 

SUPPORT AND RESISTANCE

September 19 S&P 500

Support    2959.00      Resistance    2983.00

September 19 U.S. Dollar Index

Support    96.900        Resistance    97.240

September 19 Euro Currency

Support    1.12500      Resistance    1.12910

September 19 Japanese Yen

Support    .92180        Resistance    .92530

September 19 Canadian Dollar

Support    .76480        Resistance    .76780

September 19 Australian Dollar

Support    .6938          Resistance    .6994

September 19 Thirty Year Treasury Bonds

Support    154^22       Resistance     155^16

August 19 Gold

Support    1384.0        Resistance     1403.0

September 19 Copper

Support    2.6200        Resistance     2.6700

August 19 Crude Oil

Support    57.21          Resistance     58.34



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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