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RBA Leaves Rates Unchanged


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December 5, 2017

STOCK INDEX FUTURES

S&P 500 and Dow Jones futures advanced to record highs yesterday after over the weekend the Senate passed its version of a $1.4 trillion package of tax cuts in a narrow 51-49 vote. This vote moves the legislation closer to approval by the end of the year.

Talks will likely begin next week between the Senate and the House, which had approved its own version of the legislation.

Once the bills are reconciled, the resulting legislation could cut corporate tax rates to 20% from 35%.

The 8:45 central time November PMI services index report is expected to be 54.7 and the 9:00 November Institute for Supply Management nonmanufacturing index is anticipated to be 59.

The computer models that I use continue to generate bullish signals for stock index futures.

The main trend for stock index futures is higher.

CURRENCY FUTURES

The U.S. dollar gained in spite of news that the U.S. trade deficit widened in October.

The trade gap in goods and services expanded 8.6% from the prior month to a seasonally adjusted $48.73 billion in October. Economists had expected a narrower deficit of $47.5 billion.

The British pound declined due to disappointment over the lack of a Brexit deal.

The Canadian dollar advanced on news that Canada's trade deficit in October narrowed from the previous month to a seasonally adjusted 1.47 billion Canadian dollars.

The Australian dollar is higher after data showed stronger retail sales.

The Reserve Bank of Australia held its regularly scheduled policy meeting today. Australias central bank kept its cash rate target at a record low of 1.5%, which was widely expected by economists.

This decision comes after RBA Governor Philip Lowe late last month told economists there is no compelling reason for a change in interest rates.

INTEREST RATE MARKET FUTURES

The U.S. Senate Banking Committee will vote on the nomination of Jerome Powell to be chairman of the Federal Reserve.

There are no Federal Reserve speakers scheduled for today.

The Treasury will auction 52 week bills today.

According to financial futures markets, the probability that the Federal Open Market Committee will increase its fed funds rate at the December 12-13 meeting is over than 99%.

SUPPORT AND RESISTANCE

December 17 S&P 500

Support 2633.00 Resistance 2651.00

December 17 U.S. Dollar Index

Support 92.960 Resistance 93.370

December 17 Euro Currency

Support 1.18170 Resistance 1.18930

December 17 Japanese Yen

Support .88650 Resistance .89090

December 17 Canadian Dollar

Support .78730 Resistance .79310

December 17 Australian Dollar

Support .7595 Resistance .7667

March 18 Thirty Year Treasury Bonds

Support 152^16 Resistance 153^8

February 18 Gold

Support 1267.0 Resistance 1283.0

March 18 Copper

Support 2.9700 Resistance 3.1100

January 18 Crude Oil

Support 57.02 Resistance 57.98

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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