U.S.-China Trade Tensions Ease Slightly

by Archer Financial Services | May 21, 2019

By Alan Bush | Senior Financial Economist at ADMIS   

STOCK INDEX FUTURES

U.S. stock index futures are higher after the U.S. temporarily eased restrictions on China’s Huawei Technologies, reducing investor concerns over a further escalation of the trade war between the U.S. and China.

The 9:00 central time April existing home sales report is expected to be 5.37 million.

My view remains that the global reflation scenario is on track and easier credit conditions from most of the world’s central banks are coming and will be the dominant fundamental that supports stock index futures in the long term. But, first we need to get past the U.S.-China trade hurdle.
 

CURRENCY FUTURES

The U.S. dollar advanced to a one month high, as the probability of a rate cut from the Federal Reserve in December declined.

The euro currency is lower due to concerns about upcoming European parliamentary elections.

The British pound is higher in spite of news that U.K. manufacturing orders came in at the lowest level since late 2016, according to the Confederation of British Industry.

The Australian dollar is lower after Reserve Bank of Australia Governor Philip Lowe said a rate cut will be discussed at its June 4 policy meeting. 
 

INTEREST RATE MARKET FUTURES

Federal Reserve speakers today are Chicago Federal Reserve Bank President Charles Evans at 9:45 and Boston Federal Reserve Bank President Eric Rosengren at 11:00.

Financial futures markets are predicting there is a 68% probability that the Federal Open Market Committee will lower its fed funds rate by 25 basis points or more at its December 11 policy meeting, which compares to 73% late last week.

Flight to quality buying continues to underpin futures.

 

SUPPORT AND RESISTANCE

June 19 S&P 500

Support    2843.00      Resistance    2867.00

June 19 U.S. Dollar Index

Support    97.710        Resistance    97.990

June 19 Euro Currency

Support    1.11570      Resistance    1.11990

June 19 Japanese Yen

Support    .90550        Resistance    .91130

June 19 Canadian Dollar

Support    .74430        Resistance    .74780

June 19 Australian Dollar

Support    .6866          Resistance    .6938

June 19 Thirty Year Treasury Bonds

Support    149^0         Resistance     149^24

June 19 Gold

Support    1268.0        Resistance     1279.0

July 19 Copper

Support    2.7150        Resistance     2.7500

July 19 Crude Oil

Support    62.85          Resistance     63.95


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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