Inflation Accelerates in the Euro Zone

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

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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