By Alan Bush | Senior Financial Economist at ADMIS
Stock index futures are sharply lower due to the coronavirus and the lack of consensus on President Trump’s fiscal stimulus plan in Congress.
The consumer price index increased 0.1% in February from the previous month, which was as expected and the consumer price index, excluding food and energy categories, increased 0.2%, as anticipated.
The March Atlanta Federal Reserve business inflation expectations report will be released at 9:00 central time. Last month, inflations expectations were 1.7%.
While traders focus on the negative bearish influence of the coronavirus, and rightly so, it will be the bullish impact of substantially easier credit from the world’s central banks that will dominate in the long term.
The European Central Bank is expected to ease policy at its meeting tomorrow, as authorities take measures to shield economic growth from the impact of the coronavirus.
The Bank of England cut its benchmark interest rate today in a move aimed at reducing the negative impact of the coronavirus on the U.K. economy. Officials agreed to cut the BoE's benchmark interest rate by 50 basis points to 25 basis points from 75 basis points. The BOE last cut its key interest rate in August 2016.
The BoE made its move just over a week after the Federal Reserve lowered its key interest rate.
In addition to a reduction in its key lending rate, the BoE's measures included a new facility to encourage banks to lend as much as GBP100 billion ($129 billion) to small businesses, along with and a reduction in capital requirements.
The Bank of Japan is likely to ease its monetary policy at its March 18-19 meeting.
The fourth quarter capacity utilization rate in Canada was 81.2% when 81.1% was estimated.
Flight to quality buying is coming into the interest rate futures markets.
The Treasury will auction ten-year notes today.
Based on financial futures markets, there is virtually a 91% probability of a 75 basis point cut in the fed funds rate to 25 to 50 basis points and a 9% probability of a 100 basis point cut to zero to 25 basis points at the March 18 Federal Open Market Committee meeting.
The most important fundamentals we have today are the tailwinds that are capable of sustaining a long-term bull market in gold futures. The flow of funds into gold may just be getting started.
The price of gold has already advanced 11% this year and could be on its way to testing its record high of just under $1918 that was set in 2011.
March 20 S&P 500
Support 2757.00 Resistance 2881.00
June 20 U.S. Dollar Index
Support 95.750 Resistance 96.320
June 20 Euro Currency
Support 1.13250 Resistance 1.14150
June 20 Japanese Yen
Support .95130 Resistance .96470
June 20 Canadian Dollar
Support .72630 Resistance .73140
June 20 Australian Dollar
Support .6478 Resistance .6544
June March 20 Thirty Year Treasury Bonds
Support 178^16 Resistance 182^24
April 20 Gold
Support 1647.0 Resistance 1673.0
April 20 Crude Oil
Support 32.60 Resistance 36.42
May 20 Copper
Support 2.4950 Resistance 2.5450
For more information about these markets, please contact Alan at 312.242.7911 or via email at firstname.lastname@example.org. 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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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.