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More Accommodation Likely from Central Banks

by Archer Financial Services | May 13, 2020

By Alan Bush | Senior Financial Economist at ADMIS   

 

STOCK INDEX FUTURES

Stock index futures traded higher in the overnight trade as investors awaited Federal Reserve Chairman Jerome Powell's comments about the outlook for monetary policy. 
     
Mr. Powell's webcam speech began at 8:00 central time and contained no major surprises.

The mortgage applications index in the week ended May 8 increased 0.3%.

The Atlanta Fed's business inflation expectations survey for May will be released at 9:00. Last month the survey showed inflation expectations at 1.4%.

In recent weeks stock index futures have overperformed the news. 

CURRENCY FUTURES

The U.S. dollar is lower but remains in a trading range.  Prospects of more accommodation from the Federal Reserve have undermined the greenback in recent days.

The euro currency is higher in spite of news that euro zone factory output fell at the fastest rate on record in March. The European Union's statistics agency said industrial output in the 19 countries that share the euro was 11.3% lower than in February and was down 12.9% from the same month last year.   

German Chancellor Merkel said she will respect the German Constitutional Court's ruling on the European Central Bank's asset purchase program.

The British pound is higher even though a report showed U.K. retail sales fell 19.1% in April compared with April last year. 

In addition, the U.K. monthly gross domestic product dropped by 5.8% in March, although this was better than the anticipated 8.0% decline.

INTEREST RATE MARKET FUTURES 

The Treasury will auction 30-year bonds today.

The Treasury is auctioning $96 billion across the 3-year, 10-year, and the 30-year maturities this week. The Treasury will auction 20-year bonds next week. 

Futures are higher across the board in anticipation of more accommodation from the Federal Reserve.

SUPPORT & RESISTANCE


June 20 S&P 500
Support    2820.00    Resistance    2880.00 

June 20 U.S. Dollar Index
Support    99.520       Resistance    100.200

June 20 Euro Currency
Support    1.08310     Resistance    1.09100 

June 20 Japanese Yen
Support    .93180        Resistance    .93800

June 20 Canadian Dollar
Support    .70920        Resistance    .71450 

June 20 Australian Dollar
Support    .6447           Resistance    .6533

June 20 Thirty Year Treasury Bonds
Support    179^24       Resistance     180^30

June 20 Gold
Support    1700.0         Resistance    1727.0 

July 20 Copper
Support    2.3300         Resistance    2.3750 

July 20 Crude Oil
Support    25.42            Resistance    26.82

 



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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