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Thirty Year Treasury Bond Futures Likely to Recover from Lower Morning Prices

by Archer Financial Services | Jul 18, 2019

By Alan Bush | Senior Financial Economist at ADMIS   

STOCK INDEX FUTURES

Treasury Secretary Steven Mnuchin said he and U.S. Trade Representative Robert Lighthizer will talk with their Chinese counterparts later today, but “complicated issues” remain.

Initial jobless claims increased 8,000 to 216,000 in the week ended July 13, which is in line with expectations.

The Philadelphia Federal Reserve business outlook survey soared to a 2-month high and jumped by the most in a decade. The outlook survey advanced to 21.8 in June, which significantly beat expectations of 5.

The 9:00 central time June leading indicator index is expected to be up .1%,

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

There was only limited support for the U.S. dollar on news that the Philadelphia Federal Reserve said its manufacturing business outlook came in stronger than anticipated.

Interest rate differential expectations are turning slightly bearish for the U.S. dollar.

The British pound is higher, as U.K. retail sales recovered unexpectedly in June and the European Union's Chief Brexit negotiator suggested he is open to work on alternative plans for the Irish border issue.

Retail sales in the U.K. increased 1.0% in June when analysts forecast a decline of 0.3%.

INTEREST RATE MARKET FUTURES

Futures came under pressure when the Philadelphia Federal Reserve’s business outlook survey was released.

New York Federal Reserve Bank President John Williams will speak at 1:15.

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 easier credit conditions.
 

SUPPORT AND RESISTANCE

September 19 S&P 500

Support    2971.00      Resistance    3001.00

September 19 U.S. Dollar Index

Support    96.650        Resistance    97.030

September 19 Euro Currency

Support    1.12470      Resistance    1.12980

September 19 Japanese Yen

Support    .92950        Resistance    .93400

September 19 Canadian Dollar

Support    .76520        Resistance    .76830

September 19 Australian Dollar

Support    .7010          Resistance    .7062

September 19 Thirty Year Treasury Bonds

Support    154^4         Resistance     155^8

August 19 Gold

Support    1412.0        Resistance     1433.0

September 19 Copper

Support    2.6900        Resistance     2.7200

September 19 Crude Oil

Support    56.34          Resistance     57.65



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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