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Bank of England Increases Its Asset-Purchase Plan

By Alan Bush | Senior Financial Economist at ADMIS   

STOCK INDEX FUTURES

Jobless claims in the week ended June 13 were 1,508,000 when 1,220,000 were expected. 

The June Philadelphia Federal Reserve business outlook survey was positive 27.5 when negative 22.7 was anticipated.

The 9:00 central time May leading indicators index is expected to be up 1.7%.

A recovery from the lower morning prices is likely.  

The technical picture remains positive for stock index futures.

CURRENCY FUTURES

The U.S. dollar is higher for a third day.

Euro zone banks borrowed 1.3 trillion euros ($1.46 trillion) from the European Central Bank via a long-term lending facility. The ECB has relied heavily on its long-term loan program to help businesses and households. 
 
The U.S. dollar appears to be bottoming and the euro currency appears to be topping, especially now that the European Central Bank is becoming more accommodative.  

The Bank of England held its regularly scheduled policy meeting today.  The U.K. central bank said it increased the target for its bond-buying program to 745 billion pounds ($935.35 billion), from 645 billion pounds previously. The BoE kept its benchmark interest rate at 0.1%, which is a record low. Officials indicated they are reviewing the merits of lowering their policy rate to below zero. 

The Australian dollar is lower after a report showed employment in Australia decreased 227,700 to 12,154,100 people. Full-time employment decreased 89,100 to 8,540,000 people and part-time employment decreased 138,600 to 3,614,100 people. The unemployment rate increased 0.7 pts to 7.1%.

INTEREST RATE MARKET FUTURES 

Futures are higher in light of weaker stock index futures. 

Federal Reserve speakers today are Neel Kashkari at 10:00, Loreta Mester at 11:15, James Bullard at 1:00 and Mary Daly at 6:00. 

According to financial futures markets there is a 97.8% probability that the FOMC will leave its fed funds rate unchanged at zero to 25 basis points at its July 29 policy meeting.

SUPPORT & RESISTANCE


September 20 S&P 500
Support    3060.00     Resistance    3124.00 

September 20 U.S. Dollar Index
Support    96.900       Resistance    97.380

September 20 Euro Currency
Support    1.12360     Resistance    1.12900 

September 20 Japanese Yen
Support    .93400        Resistance    .93492

September 20 Canadian Dollar
Support    .73440        Resistance    .74000 

September 20 Australian Dollar
Support    .6831          Resistance    .6910

September 20 Thirty Year Treasury Bonds
Support    175^24       Resistance    177^12

August 20 Gold
Support    171210        Resistance    1752.0 

September 20 Copper
Support    2.5900         Resistance     2.6475 

August 20 Crude Oil
Support   37.34             Resistance    39.00

 



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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