By Alan Bush | Senior Financial Economist at ADMIS
Some of Friday’s pressure on stock index futures was due to unfavorable results from the Federal Reserve's stress tests on banks.
The 9:00 central time May pending home sales report is expected to show an 11.3% increase and the 9:30 June Dallas Federal Reserve manufacturing index is anticipated to be negative 26.
Stock index futures will be supported by the belief that any slowdown in the global economic recovery will be met with additional accommodation from the world’s central banks, along with more fiscal stimulus.
The euro currency is higher after preliminary data showed German consumer prices increased more than expected. Consumer prices advanced 0.6% in June, as measured by national standards and 0.7% in E.U.-harmonized standards. Both figures were above the 0.3% increase economists predicted in both cases.
The British pound is lower, as traders became nervous about the Brexit talks that are scheduled to resume this week. There are concerns that the U.K. could walk away without a meaningful trade deal with the European Union.
The Japanese yen is lower after a report showed Japan’s May overall retail sales fell 12.3% on the year.
Interest rate differential expectations have recently turned slightly more favorable to the U.S. dollar.
The yield on the 10-year U.S. Treasury note ticked up to 0.649% from 0.636% Friday.
John Williams of the Federal Reserve will speak at 2:00.
According to financial futures markets there is a 96.7% probability that the Federal Open Market Committee will leave its fed funds rate unchanged at zero to 25 basis points at its July 29 policy meeting.
September 20 S&P 500
Support 2980.00 Resistance 3031.00
September 20 U.S. Dollar Index
Support 97.030 Resistance 97.550
September 20 Euro Currency
Support 1.12300 Resistance 1.13130
September 20 Japanese Yen
Support .93080 Resistance .93580
September 20 Canadian Dollar
Support .73000 Resistance .73350
September 20 Australian Dollar
Support .6842 Resistance .6900
September 20 Thirty-Year Treasury Bonds
Support 178^20 Resistance 179^16
August 20 Gold
Support 1772.0 Resistance 1795.0
September 20 Copper
Support 2.6650 Resistance 2.7100
August 20 Crude Oil
Support 37.44 Resistance 39.55
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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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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.