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Flight to Quality Buying in Treasuries


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November 6, 2017

STOCK INDEX FUTURES

Global stocks were mixed with traders keeping a close eye on developments in U.S. tax reform plans and after a series of arrests in Saudi Arabia as part of a crackdown on corruption.

There was some support from the energy sector as crude oil prices climbed to the highest levels in over two years.

U.S. House of Representatives Speaker Paul Ryan on Sunday said Republican lawmakers are still on track to vote on a revised tax bill before the U.S. Thanksgiving holiday on November 23.

The main trend for stock index futures is higher.

CURRENCY FUTURES

The U.S. dollar is a little higher due to optimism that there will be tax reform.

The euro currency is a little lower in spite of news that euro zone September producer prices increased .6% on a month to month basis when up .4% was expected. On an annualized basis the producer price index was up 2.9% against an anticipated 2.8% advance.

The Japanese yen is higher against U.S. dollar even though Bank of Japan Governor Haruhiko Kuroda said the central bank would be patient about easy credit conditions.

INTEREST RATE MARKET FUTURES

Flight to quality buying is coming into the longer end of the curve in light of news of the series of arrests in Saudi Arabia.

New York Federal Reserve Bank President William Dudley will speak at 11:10 central time.

The Federal Reserve Bank of New York confirmed today that William Dudley expects to retire by the middle of 2018, stepping down before his official term ends in January 2019.

According to financial futures markets, the probability that the Federal Open Market Committee will increase its fed funds rate at the December 13 meeting is over 98%.

SUPPORT AND RESISTANCE

December 17 S&P 500

Support 2572.00 Resistance 2587.00

December 17 U.S. Dollar Index

Support 94.650 Resistance 95.030

December 17 Euro Currency

Support 1.16020 Resistance 1.16590

December 17 Japanese Yen

Support .87230 Resistance .88010

December 17 Canadian Dollar

Support .78130 Resistance .78650

December 17 Australian Dollar

Support .7624 Resistance .7679

December 17 Thirty Year Treasury Bonds

Support 153^8 Resistance 154^16

December 17 Gold

Support 1264.0Resistance 1278.0

December 17 Copper

Support 3.1100 Resistance 3.1850

December 17 Crude Oil

Support 55.53 Resistance 56.38

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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About the author


Alan Bush has been a commodity analyst since 1976 focusing on the fundamental and technical aspects of stock index, interest rate and foreign currency markets. He has authored several articles for Stocks Futures and Options magazine and produced the “Futures Tech Focus” program, which is a technically based market outlook.

Alan served on the faculty of Oakton College as instructor of a course entitled, “Principles of Technical Analysis.” He has been interviewed on many national television programs, appearing on the Nightly Business Report, CNBC, CNN Moneyline, Reuters Television and Web FN. In addition, he has been frequently quoted in The Wall Street Journal, USA Today, The Bond Buyer and the Chicago Tribune and has been regularly interviewed on Chicago’s WMAQ radio business reports.

Alan can be reached at (312) 242-7911, or via email at alan.bush@admis.com.

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