Tentative Deal to Avert Another Partial Government Shutdown
Alan Bush of ADM Investor Services - InsideFutures.com - Tue Feb 12, 8:42AM CST

February 12, 2019

 

STOCK INDEX FUTURES

U.S. stock index futures advanced after lawmakers reached a tentative deal to avert another partial government shutdown. In addition, there was support when the U.S. and China expressed optimism about their ongoing trade talks.

Working level discussions started on Monday and will continue through Wednesday. Higher principal level discussions will take place Thursday and Friday with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin.

Futures are higher in spite of news that the National Federation of Independent Business small business optimism index declined for a fifth straight month.

The NFIB said its optimism index fell to 101.2 in January from 104.4 a month ago. Economists were expecting a reading of 102.  

The 9:00 central time December JOLTS report is expected to show 6.9 million. JOLTS stands for Job Openings and Labor Turnover Survey.

Stock index futures have been performing better than the news would suggest since the lows were made in late December.

 

CURRENCY FUTURES

The U.S. dollar is lower and the euro currency is a little higher.

Higher crude oil prices supported the “commodity currencies,” the Canadian dollar and the Australian dollar.

Oil prices are being supported by OPEC led production cuts. Saudi Arabia said it would reduce production by more than half a million barrels per day.

 

INTEREST RATE MARKET FUTURES

Flight to quality longs are being liquidated for a second day due to a tentative deal to avert another partial government shutdown and on optimism that progress will be made in the U.S.-China trade talks this week.

Federal Reserve speakers this afternoon are Kansas City Federal Reserve Bank President Esther George at 4:30 and Cleveland Federal Reserve Bank President Loretta Mester at 5:30.

Financial futures markets are predicting an 85% probability that the fed funds rate will remain unchanged at the current level of 2.25%-2.50% this year and there is a 15% chance for reduction in the fed funds rate by 25 basis points in 2019.

The thirty year Treasury bond futures have remained in a broad trading range since the first week in January. A U.S.-China trade agreement, or hint of one, would be the catalyst to take futures lower.

 

SUPPORT AND RESISTANCE

March 19 S&P 500

Support    2702.00      Resistance    2738.00

 

March 19 U.S. Dollar Index

Support    96.610        Resistance    97.050

 

March 19 Euro Currency

Support    1.12810      Resistance    1.13420

 

March 19 Japanese Yen

Support    .90540        Resistance    .90940

 

March 19 Canadian Dollar

Support    .75190        Resistance    .75600

 

March 19 Australian Dollar

Support    .7052          Resistance    .7111

 

March 19 Thirty Year Treasury Bonds

Support    145^20       Resistance    146^22

 

April 19 Gold

Support    1308.0        Resistance    1322.0

 

March 19 Copper

Support    2.7550        Resistance    2.8050

 

March 19 Crude Oil

Support    52.21          Resistance    54.34

 

 

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