header_img

Federal Reserve to Add Massive Stimulus

by Archer Financial Services | Mar 23, 2020

By Alan Bush | Senior Financial Economist at ADMIS   

 

STOCK INDEX FUTURES

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.

CURRENCY FUTURES

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.

INTEREST RATE FUTURES MARKET

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.



For more information about these markets, please contact Alan at 312.242.7911  or via email at alan.bush@admis.com. Thank you.

Would you like to open an account with us? Go to our interactive New Account application at Open an Account. It is fast, saves on postage and it’s green.

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.

Offers