U.S. Dollar Continues to Underperform the News
April 20, 2017
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STOCK INDEX FUTURES
Higher prices today are linked to yesterday’s release of the Fed’s “Beige Book” on the economy, which was optimistic about business conditions around the nation. The tone of the report was a little stronger than what has been suggested by recent economic reports.
This book is produced approximately two weeks before the monetary policy meetings of the Federal Open Market Committee and contains anecdotal evidence on the economic situation in each of the 12 Federal Reserve districts.
In addition, futures were supported by firmer equity markets in Europe, as corporations in the euro zone reported stronger than expected earnings reports.
Also, the bearish geopolitical influences appear to not be getting any worse.
Jobless claims in the week ended April 15 increased 10,000 to 244,000, which compares to expectations of 240,000.
The April Philadelphia Federal Reserve Business Outlook Survey was 22, when 25.5 was anticipated.
The 9:00 central time March leading index is estimated to be up .2%.
Recent declines are not the beginning of any new bear market for stock index futures.
The U.S. dollar is lower in spite of yesterday’s release of the Fed’s upbeat “Beige Book” on the economy. In addition, the greenback is lower even though there is an increased probability of a fed funds rate hike at its June policy meeting.
The U.S. dollar continues to show a tendency to underperform the news.
The euro currency is higher on news that construction in the euro zone increased 6.9% on a month to month basis and 7.7% on an annualized basis. This is the largest increase since March 2012.
INTEREST RATE MARKET FUTURES
Futures are lower as a result of the Fed’s upbeat report on the economy and increasing prospects of a fed funds rate increase at its June meeting.
The probability of a rate hike at the Federal Open Market Committee’s May 3 policy meeting is 4%, which is unchanged from Wednesday and the probability of a rate increase at the June 14 meeting is 57%, which compares to 44% yesterday.
Recent flight to quality buying has supported the 30 year Treasury bond futures. This flight to quality buying has more than offset the bearish influences of rising global inflation and an expanding world economy.
Once the geopolitical issues settle down, the dominant influences of a stronger world economy and rising inflation will take futures lower.
SUPPORT AND RESISTANCE
June 17 S&P 500
Support 2331.00 Resistance 2347.00
June 17 U.S. Dollar Index
Support 99.250 Resistance 99.830
June 17 Euro Currency
Support 1.07300 Resistance 1.08170
June 17 Japanese Yen
Support .91550 Resistance .92310
June 17 Canadian Dollar
Support .74110 Resistance .74550
June 17 Australian Dollar
Support .7478 Resistance .7540
June 17 Thirty Year Treasury Bonds
Support 153^20 Resistance 155^0
June 17 Gold
Support 1276.0Resistance 1287.0
July 17 Copper
Support 2.5150 Resistance 2.5800
June 17 Crude Oil
Support 50.52 Resistance 51.66
For more information about these markets, please contact Alan at 312.242.7911 or via email at email@example.com. Thank you.
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