By Alan Bush | Senior Financial Economist at ADMIS
At one point in the overnight trade futures were limit down.
Much of this selling was due to Congress delaying a vote on a stimulus package.
However, futures this morning reversed and are sharply higher, after the Federal Reserve said it will purchase Treasuries and mortgage backed securities “in the amounts needed.”
The question is if futures can hold the gains.
The U.S. dollar was higher in a flight to quality move in the overnight trade. Some of these gains were given back when the Federal Reserve announced an open ended asset purchase plan.
The British pound is close to multi-decade lows.
There was support for the Japanese yen when Japan’s Prime Minister Shinzo Abe pledged huge stimulus will be forthcoming.
Flight to quality buying came in, especially in the overnight trade when stock index futures were sharply lower. Futures are off the highs now after the announcement of the Fed’s new massive stimulus plan. Earlier Neel Kashkari of the Fed indicated the Fed will provide ample funds.
The newly normal yield curve is an encouraging indication that there will be at least some economic recovery late this year and into next year.
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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.