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Thirty Year Treasury Bond Futures Likely to Recover from Lower Morning Prices


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July 18, 2019

STOCK INDEX FUTURES

Treasury Secretary Steven Mnuchin said he and U.S. Trade Representative Robert Lighthizer will talk with their Chinese counterparts later today, but complicated issues remain.

Initial jobless claims increased 8,000 to 216,000 in the week ended July 13, which is in line with expectations.

The Philadelphia Federal Reserve business outlook survey soared to a 2-month high and jumped by the most in a decade. The outlook survey advanced to 21.8 in June, which significantly beat expectations of 5.

The 9:00 central time June leading indicator index is expected to be up .1%,

My view remains that the global reflation scenario is on track and easier credit conditions from most of the worlds central banks, including the Federal Reserve, are coming and will be the dominant fundamental that supports stock index futures in the long term.

CURRENCY FUTURES

There was only limited support for the U.S. dollar on news that the Philadelphia Federal Reserve said its manufacturing business outlook came in stronger than anticipated.

Interest rate differential expectations are turning slightly bearish for the U.S. dollar.

The British pound is higher, as U.K. retail sales recovered unexpectedly in June and the European Union's Chief Brexit negotiator suggested he is open to work on alternative plans for the Irish border issue.

Retail sales in the U.K. increased 1.0% in June when analysts forecast a decline of 0.3%.

INTEREST RATE MARKET FUTURES

Futures came under pressure when the Philadelphia Federal Reserves business outlook survey was released.

New York Federal Reserve Bank PresidentJohn Williams will speak at 1:15.

Financial futures markets are predicting there is almost a 100% probability that the Federal Open Market Committee will lower its fed funds rate by 25 basis points or more at its July 30-31 policy meeting. A second and possibly a third rate cut is anticipated by financial futures markets later this year.

In the longer term, higher prices are likely for futures, as most major central banks are likely to embark on a new round of easier credit conditions.

SUPPORT AND RESISTANCE

September 19S&P 500

Support 2971.00 Resistance 3001.00

September 19 U.S. Dollar Index

Support 96.650 Resistance 97.030

September 19Euro Currency

Support 1.12470 Resistance 1.12980

September 19Japanese Yen

Support .92950 Resistance .93400

September 19Canadian Dollar

Support .76520 Resistance .76830

September 19Australian Dollar

Support .7010 Resistance .7062

September 19 Thirty Year Treasury Bonds

Support 154^4 Resistance 155^8

August 19Gold

Support 1412.0 Resistance 1433.0

September 19Copper

Support 2.6900 Resistance 2.7200

September 19 Crude Oil

Support 56.34 Resistance 57.65

Contact Alan for more extensive information on these markets 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 information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by Archer Daniels Midland Company. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. 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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