Futures Commentary and Analysis

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U.S. Dollar Continues to Underperform the News
Alan Bush - IF - Thu Apr 20, 10:11AM CDT

April 20, 2017

Watch video commentary here:https://youtu.be/XoYBu4cGbuo

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.

CURRENCY 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 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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