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Global Trade Issues Dominate Markets Again


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STOCK INDEX FUTURES

The slightly better feeling about the global trade situation yesterday was probably because there was no bad news on the trade front. However, that slightly better feeling lasted only one day.

Today we have newsthat China will impose $16 billion of 25% retaliatory tariffs on August 23.

U.S. stock index futures are performing well, with the S&P 500 close to all-time highs, in spite of the ongoing global trade uncertainties.

The still relatively low global interest rate environment and the mostly stronger than estimated U.S. corporate earnings reports remain supportive.

CURRENCY FUTURES

The U.S. dollar is higher due to increasing prospects of a fed funds rate hike in September.

The British pound fell below $1.29 for the first time in almost a year on continuing worries that the U.K. will leave the E.U. without a trade deal.

Bank of England Governor Mark Carney recently said the chances of a no-deal Brexit were "uncomfortably high."

The Japanese yen advanced to a one week high after reports that Bank of Japan board members disagreed on how far interest rates should be allowed to move from the central bank's target rate.

The Canadian dollar and the Australian dollar are lower due to weaker crude oil prices.

In addition, there was pressure on the Canadian dollar on news that building permits in Canada declined in June.

The total value of building permits in June fell 2.3%, when market expectations were for a 1.2% decline, according to economists.

INTEREST RATE MARKET FUTURES

There was some pressure on futures, especially at the long end of the curve, when Richmond Federal Reserve Bank PresidentTom Barkinsaid the economy is strong.

The Treasury will auction ten year notes today.

The probability of a fed funds rate hike at the Federal Open Market Committees September 26 meeting is 98%, which compares to 94% yesterday.

Also, there are increasing probabilities of an additional rate hike in December.

The longer term trend for futures is lower, especially for the thirty year Treasury bonds.

SUPPORT AND RESISTANCE

September 18 S&P 500

Support 2852.00 Resistance 2866.00

September 18 U.S. Dollar Index

Support 94.720 Resistance 95.270

September 18 Euro Currency

Support 1.16010 Resistance 1.16720


September 18 Japanese Yen

Support .89600 Resistance .90510

September 18 Canadian Dollar

Support .76210 Resistance .76740

September 18 Australian Dollar

Support .7376 Resistance .7445

September 18 Thirty Year Treasury Bonds

Support 142^2 Resistance 142^26

December 18 Gold

Support 1213.0Resistance 1226.0

September 18 Copper

Support 2.7300 Resistance 2.7750

September 18 Crude Oil

Support 67.83 Resistance 69.45

Please contact Alan for more extensive information on these futures markets 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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