January FOMC Minutes to be Released Today

February 21, 2018

STOCK INDEX FUTURES

The 8:45 central time February PMI composite index is expected to be 54 and the 9:00 January existing home sales report is anticipated to show 5.65 million.

At 1:00 the Federal Open Market Committee will release the minutes of its January policy meeting.

Traders will be watching closely for any thoughts the U.S. central bank may have on the impact of the recently passed tax plan and the development of inflationary pressures.

In spite of the recent correction, I am not seeing the beginning of any new long term bear market for stock index futures.

CURRENCY FUTURES

The U.S. dollar is higher today after last week it traded at its lowest level since January 2015.

Some support for the greenback is coming from ideas that todays release of the minutes from last months Federal Open Market Committee meeting will be hawkish on balance.

Expect lower prices for the U.S. dollar after the minutes are released.

Also, in the longer term, lower prices are likely for the greenback, as interest rate differential expectations are likely to undermine the U.S. dollar.

The euro currency is lower on news that business activity in the euro zone cooled in February.

A composite Purchasing Managers Index for the euro zone fell to 57.5 in February from 58.8 in January.

The double top resistance at the 1.2579 area in the March euro currency is likely to be taken out in the next few weeks.

Longer term, the euro will be supported by the belief that the European Central Bank will remove some of its accommodation later this year and may actually hike interest rates in 2019.

In spite of lower prices today, the main trend for euro currency is higher.

The British pound is lower after a report showed the U.K. unemployment rate increased unexpectedly in the fourth quarter of 2017.

INTEREST RATE MARKET FUTURES

The U.S. Treasury is selling $258 billion in new debt this week.

Today the Treasury will auction five year notes.

The probability of a fed funds rate increase at the Federal Open Market Committees March 21 policy meeting is 83%, which is unchanged from yesterday.

At 7:15 this evening Minneapolis Federal Reserve Bank President Neel Kashkari will participate in a moderated question and answer session.

The March thirty year Treasury bond futures recently made a double bottom at 143^4.

I expect this double bottom to be taken out.

Futures are likely to work lower, as commodity and wage inflation accelerates this year.

SUPPORT AND RESISTANCE

March 18 S&P 500

Support 2703.00 Resistance 2725.00

March 18 U.S. Dollar Index

Support 89.550 Resistance 89.980

March 18 Euro Currency

Support 1.23150 Resistance 1.23750

March 18 Japanese Yen

Support .92730 Resistance .93450

March 18 Canadian Dollar

Support .78750 Resistance .79210

March 18 Australian Dollar

Support .7825 Resistance .7917

March 18 Thirty Year Treasury Bonds

Support 143^4 Resistance 144^12

April 18 Gold

Support 1324.0Resistance 1339.0

March 18 Copper

Support 3.1600 Resistance 3.2000

April 18 Crude Oil

Support 60.84 Resistance 62.03

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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