By Alan Bush | Senior Financial Economist at ADMIS
U.S. stock index futures advanced, as the Federal Reserve’s actions eased strains. S&P 500, Dow and NASDAQ futures advanced above downtrend lines.
The Federal Reserve said it will provide billions of dollars at near-zero interest rates to central banks that are struggling with dollar shortages in many parts of the world.
In addition to the Federal Reserve, the European Central Bank, Bank of England and central banks in Asia have injected large amounts of liquidity into markets this week.
The 9:00 February existing home sales report is expected to be 5.5 million.
Yesterday, the U.S. dollar index reached its highest level since January 2017, as international demand for U.S. dollars surged.
However, today the greenback is lower, as international liquidity concerns appear to be easing.
The euro currency is higher today. Market sentiment improved by massive stimulus measures announced by central banks and governments worldwide, including the ECB's promise to start buying €750 billion in bonds through 2020.
The British pound is higher, as market sentiment improved. The Bank of England cut interest rates by 15 basis points yesterday to a new low of 10 basis points and increased its holdings of U.K. government and corporate bonds by £200 billion.
The Australian dollar is higher today after yesterday it hit an 18-year low.
Both interest rate futures a stock index futures are higher when they often move in opposite directions. This appears to be an indication of a more optimistic view of the economy longer term.
In recent weeks the front end of the yield curve has become less inverted and is flattish now, which is an encouraging sign for the possibility of at least some economic recovery late this year and into 2021.
June 20 S&P 500
Support 2325.00 Resistance 2502.00
June 20 U.S. Dollar Index
Support 101.800 Resistance 103.870
June 20 Euro Currency
Support 1.07000 Resistance 1.08770
June 20 Japanese Yen
Support .90270 Resistance .91950
June 20 Canadian Dollar
Support .68770 Resistance .70800
June 20 Australian Dollar
Support .5658 Resistance .5996
June 20 Thirty Year Treasury Bonds
Support 171^16 Resistance 176^8
June 20 Gold
Support 1460.0 Resistance 1528.0
May 20 Crude Oil
Support 24.25 Resistance 28.65
May 20 Copper
Support 1.9700 Resistance 2.2000
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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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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.