Treasury Auctions Today

October 10, 2018

STOCK INDEX FUTURES

U.S. producer prices, which is a measure of the prices businesses receive for their goods and services, increased a seasonally adjusted 0.2% in September from a month earlier and was in line with the median forecast. This is the first increase in headline inflation pressures in three months.

Excluding the often volatile food and energy categories, prices were up 0.2% in September from the previous month, which also matched economists' expectations.

The October Atlanta Federal Reserve business inflation expectations report will be released at 9:00 central time. The September number was 2.2%.

Despite of a variety of ongoing geopolitical issues, the still relatively low interest rate environment is dominating and remains long term supportive to U.S. stock index futures.

CURRENCY FUTURES

The euro currency is lower afterItalys government said it would not backtrack on plans to increase deficit spending.

The British pound is higher due to reports that the U.K. and the E.U. were making progress towards a Brexit deal.

The Canadian dollar and the Australian dollar, the commodity currencies, are lower following weaker crude oil prices.

INTEREST RATE MARKET FUTURES

Futures are lower as it remains likely that the Federal Open Market Committee will increase interest rates in December.

In addition, some of todays pressure is linked to comments made late yesterday from New York Federal Reserve Bank President John Williams when he said he expects the Federal Reserve to return its target interest rate to neutral levels within "the next year or so."

Also, supply is a bearish influence with the Treasury to auction three year and 10 year notes today.

Federal Reserve speakers today are Chicago Federal Reserve Bank PresidentCharles Evans at 11:15 and Atlanta Federal Reserve Bank PresidentRaphael Bostic at 5:00.

According to the financial futures markets, the probability of a fed funds rate hike at the Federal Open Market Committees December 19 policy meeting is 83%, which is unchanged from yesterday.

The long term trend for futures is lower, especially for the thirty year Treasury bond futures, as the U.S. economy remains strong and the FOMC will likely continue on its tightening path this year and in 2019.

SUPPORT AND RESISTANCE

December 18 S&P 500

Support 2872.00 Resistance 2893.00

December 18 U.S. Dollar Index

Support 95.210 Resistance 95.550

December 18 Euro Currency

Support 1.15370 Resistance 1.15970

December 18 Japanese Yen

Support .88650 Resistance .88990

December 18 Canadian Dollar

Support .77110 Resistance .77490

December 18 Australian Dollar

Support .7083 Resistance .7143

December 18 Thirty Year Treasury Bonds

Support 136^20 Resistance 137^26

December 18 Gold

Support 1186.0Resistance 1198.0

December 18 Copper

Support 2.7800 Resistance 2.8250

November 18 Crude Oil

Support 74.38 Resistance 75.33

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