Good morning,
DXZ9 98.04 +0.193 GCZ9 1508.0 +1.8 ESZ9 3014.75 +6.75 CLX9 58.74 +0.55
The market came into this week all amped up, being driven by the drone attack in Saudi Arabia, and ahead of numerous central bank monetary policy meetings, highlighted by the US and the UK. The results there were as expected, US cutting rates 25 bps and UK leaving rates unchanged. Following a very active trade early in the week, it feels like markets are trying to glide into the weekend. Today is options expiration for October options contracts at the CBOT. If the market does find itself in a stable, range bound trade, large open interest in options positions close to where the market is trading could have a magnet effect on the late price action.
The equity market is a touch higher, experiencing lighter volumes in the trade. Gold is a touch higher today and oil is up about 50 cents. Part of the bid to oil is coming from the hurricane systems moving across the southern portion of the US, and having the potential to create production delays. The US has been a good backstop, regarding keeping global supplies available, with all of the disruptions in the Middle East.
Grain prices are mixed, having traded in narrow ranges. Wheat has been supported of late by dryness concerns in Australia and Canada. There are some rain systems in the extended forecast, which can cause some delays to harvest. The risk there is, with the later developing crops, cold temperatures could set in and cause some stress to the unharvested crops.
In other commodity news, sugar is poised to have its biggest weekly gain in 7 months, as concerns about a supply deficit in the future continues to convince short positions to book profits. Coffee futures were lower yesterday, as the market continues this week’s correction from higher prices driven by weather concerns impacting the coffee crop. Cocoa futures area also a touch lower today, following a decent rally this week, also from weather concerns in the Ivory Coast cutting in to a large expected crop. The stronger dollar today is also applying some pressure to commodity prices here.
So, the “neutral” stance Fed Chairman Powell took in the press conference on Wednesday afternoon, is being viewed as a hawkish tone by the marketplace, with the dollar rallying, and fixed income markets pulling back a bit of the additional easing of policy that was being priced into the market. Since the Fed will be data dependent going forward, and with all factors that can influence policy remaining in full view, markets may find themselves confined to a range type trade, but vulnerable to any headline or twitter bombs.
Technical Moving Averages:
Product 50 day 100 day 200 day
SX9 884.00 886.50 914.00
CZ9 394.25 409.75 403.25
WZ9 488.25 499.50 509.75
KWZ9 423.50 447.75 480.50
MWZ9 521.75 541.75 562.75
SMZ9 303.0 309.5 315.5
BOZ9 28.90 28.57 29.42
CLX9 56.07 57.07 57.06
GCZ9 1490.3 1418.9 1368.7
LHZ9 67.250 72.215 70.680
LCZ9 108.075 109.785 114.355
KCZ9 101.45 102.55 106.20
CCZ9 2336 2389 2358
CTZ9 60.67 64.17 69.55
SBH0 12.57 12.98 13.43
JOX9 103.15 104.80 115.80
HGZ9 263.30 267.35 275.25
Thanks,
Mike
Michael Clifford
141 W Jackson Boulevard
Ste 1065
Chicago, IL 60604
Trean Group, LLC
312-604-6404