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CPI as Expected


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June 12, 2018

STOCK INDEX FUTURES

Stock index futures are higher after President Donald Trump and North Korean leader Kim Jong Un signed a joint statement at a historic summit, but offered few details on their promise to denuclearize the Korean peninsula. Additional talks are planned.

The May National Federation of Independent Business small business optimism index increased to 107.8, which compares to expectations of 105.2.

The May consumer price index rose .2%, as anticipated and the CPI, excluding the volatile food and energy sectors, was also up .2%, as estimated.

Traders appear to be gradually shifting their focus of attention more toward the still bullish overall accommodative global interest rate policies and away from the geopolitical worries.

CURRENCY FUTURES

The euro currency continues to be supported by the belief that the European Central Bank at its policy meeting on Thursday will debate the end of its quantitative easing program.

The Bank of Japan will hold its regularly scheduled policy meeting on Friday.

The U.S. dollar continued to gain against the Canadian dollar as investors react to an escalating trade conflict between the two countries.

INTEREST RATE MARKET FUTURES

Futures are lower across the board, as flight to quality longs continue to be liquidated.

The lack of flight to quality buying recently in any of the flight to quality vehicles, including Treasuries, suggests the market believes there will be a resolution to one degree or another to the variety ongoing geopolitical issues.

Today is the first day of a two day Federal Open Market Committee meeting. Tomorrow the FOMC will release a statement at 1:00 central time followed by a press conference at 1:30.

The Treasury will auction thirty year bonds today.

The probability of a fed funds rate hike from the Federal Open Market Committee tomorrow is 95%, which compares to 94% yesterday.

Although geopolitical events will inevitably develop from time to time, which will produce short periods of flight to quality buying, the main trend for futures is lower.

SUPPORT AND RESISTANCE

June 18 S&P 500

Support 2775.00 Resistance 2793.00

June 18 U.S. Dollar Index

Support 93.350 Resistance 93.960

June 18 Euro Currency

Support 1.17320 Resistance 1.18250

June 18 Japanese Yen

Support .90450 Resistance .91030

June 18 Canadian Dollar

Support .76730 Resistance .77150

June 18 Australian Dollar

Support .7583 Resistance .7625

September 18 Thirty Year Treasury Bonds

Support 142^2 Resistance 143^0

August 18 Gold

Support 1295.0Resistance 1308.0

July 18 Copper

Support 3.2300 Resistance 3.2750

July 18 Crude Oil

Support 65.73 Resistance 66.77

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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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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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