By Alan Bush | Senior Financial Economist at ADMIS
U.S. stock index futures are lower as investors worry about lingering trade tensions between Washington and Beijing.
The 2:00 PM central time June consumer credit report is expected to show an increase of $16 billion.
Over the next few weeks there will be calls for easier credit conditions from the Federal Reserve, which will place a bottom on this market.
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 euro currency is a little higher in spite of news that Germany posted the steepest year-on-year decline in industrial production since 2009.
Lower crude oil prices pressured the Canadian dollar and the Australian dollar.
There was additional pressure on the Australian dollar, as probabilities increased that the Reserve Bank of Australia will lower interest rates at its September 3 meeting.
The thirty year Treasury bond futures are sharply higher, advancing to their highest level since November 2016.
There will be increased pressure on the Federal Reserve to ease credit conditions with, according to the U.S. Treasury, China being a currencymanipulator.
In addition, several overseas central banks lowered their key interest rate recently, which exerts pressure on other central banks to do the same, including the Federal Reserve.
Financial futures markets are predicting there is almost a 100% probability that the Federal Open Market Committee will lower its fed funds rate by another 25 basis points at its next meeting on September 18.
The Treasury will auction 10 year notes today.
In the longer term, higher prices are likely for futures, especially at the long end of the curve, as most major central banks, including the Federal Reserve, are likely to embark on a new round of easier credit policies.
Continue to trade the interest rate futures from the long side, especially the 30 year Treasury bond futures.
September 19 S&P 500
Support 2830.00 Resistance 2893.00
September 19 U.S. Dollar Index
Support 97.100 Resistance 97.570
September 19 Euro Currency
Support 1.12060 Resistance 1.12600
September 19 Japanese Yen
Support .94120 Resistance .94880
September 19 Canadian Dollar
Support .74900 Resistance .75480
September 19 Australian Dollar
Support .6678 Resistance .6797
September 19 Thirty Year Treasury Bonds
Support 161^12 Resistance 163^24
October 19 Gold
Support 1475.0 Resistance 1513.0
September 19 Copper
Support 2.5400 Resistance 2.5750
September 19 Crude Oil
Support 51.43 Resistance 54.03
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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.