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Global Financial Liquidity Improves

by AFS Archer Financial Svcs | Mar 20, 2020

By Alan Bush | Senior Financial Economist at ADMIS   

 

STOCK INDEX FUTURES

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.

CURRENCY FUTURES

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.

INTEREST RATE MARKET FUTURES

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.

SUPPORT AND RESISTANCE

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


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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