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FOMC Meeting Today and Tomorrow

by Archer Financial Services | Jul 30, 2019

By Alan Bush | Senior Financial Economist at ADMIS   

STOCK INDEX FUTURES

Today is the first day of a two-day Federal Open Market Committee meeting.

Personal income in June increased 0.4% when up .3% was expected and consumer spending advanced .3%, which was as anticipated.     

Two 9:00 central time reports are scheduled. The July consumer confidence index is estimated to be 125 and the June pending home sales indexis anticipated to be up .5%.

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 advanced to a new two-month high.   

The greenback continues to be supported by last week’s comments from White House economic adviser Larry Kudlow when he said the U.S. has “ruled out” intervening in currency markets to impact the value of the dollar.

Euro zone businesses became less upbeat about their prospects during July, as pessimism in the manufacturing sector increased. The European Commission’s economic sentiment indicator, which is a measure of sentiment among consumers and businesses, fell to 102.7 from 103.3 in June. This is the lowest level since March 2016.  

The British pound declined to its lowest level since April 2017, as uncertainty remains about Britain's negotiations to leave the European Union with the possibility of a no-deal Brexit. 

The Bank of Japan left its monetary policy unchanged at its July 29-30 meeting, which was expected.

However, Japan's central bank said it wouldn't hesitate to ease monetary policies further if the need should arise.

INTEREST RATE MARKET FUTURES

Futures are mixed ahead of the Tuesday-Wednesday Federal Open Market Committee meeting.

The Federal Reserve is expected to cut interest rates tomorrow for the first time since 2008 despite last Friday’s report that showed better-than-expected second-quarter economic growth.

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 tomorrow. A second and possibly a third rate cut is anticipated by financial futures markets before the end of 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 policies.

SUPPORT AND RESISTANCE

September 19 S&P 500

Support    2998.00      Resistance    3031.00

September 19 U.S. Dollar Index

Support    97.700        Resistance    97.980

September 19 Euro Currency

Support    1.11680      Resistance    1.12070

September 19 Japanese Yen

Support    .92050        Resistance    .92600

September 19 Canadian Dollar

Support    .75850        Resistance    .76160

September 19 Australian Dollar

Support    .6885          Resistance    .6927

September 19 Thirty Year Treasury Bonds

Support    154^14       Resistance     155^8

August 19 Gold

Support    1419.0        Resistance     1436.0

September 19 Copper

Support    2.6800        Resistance     2.7300

September 19 Crude Oil

Support    56.75          Resistance     57.88

 


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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