Good morning,
DXZ9 98.210 -0.028 GCG0 1462.1 -1.7 ESZ9 3134.75 +2.00 CLF0 58.25 +0.24
The main story from the overnight trade appears to be Fed Chairman Powell, speaking in Providence, Rhode Island. These are his first public comments since his meeting with President Trump last week. For the most part, it would appear he is comfortable with where monetary is at currently. Here are a few of the headlines from his speech:
-) Monetary policy well positioned to support Fed’s goals.
-) Fed policy supporting a decisive return to 2% inflation.
-) If outlook changes materially, policy will change as well.
-) Policy appropriate provided economy stays on track.
-) Sees glass much more than half full, can fill it further (regarding economic expansion).
-) Economic conditions are generally good.
-) Household spending is “key” to ongoing favorable outlook.
-) Fed would respond if developments prompted “material reassessment”.
The other news, of particular interest to the commodity world is the Brazilian Real trading at an all-time low of 4.2484/USD. It is being driven down, in part, by a large current account deficit forecasted by the central bank for this month.
The “trade deal” effect continues to impact the various markets. Equities continued to march higher. Oil was trading well also, from trade and from the prospects of possibly seeing production quotas remain in place coming out of the OPEC+ meeting next week. Oil is also receiving support ahead of this week’s US production and stocks data, as last week’s numbers were less than what the market expected. Gold is leaking lower, in modest volumes, as safe haven positions are lightened up. Grains are slightly lower today, led down by wheat which had a big run-up yesterday. Wheat’s rally began in Europe, where persistent rains are creating planting delays and MATIF wheat to gap higher. This spread over to the US market, where weather concerns are impacting prices here as well. For soybeans and corn, the harvest percentages are catching up to the averages. Coffee had a spike higher yesterday, driven by the technicals, and not the FX market, as key resistance levels being violated brought in fresh buying. Cotton is also trading higher on the trade prospects. Sugar remains at the upper end of the recent trading range, as future supply deficits remain a concern.
Volumes may be a bit lighter this holiday week, as many trading desks are operating at less than full capacity. In addition, Friday is first notice day for many December futures contracts. In order to avoid the possibility of receiving a delivery notice, all LONG positions should be liquidated or rolled to another contract by the close of business TOMORROW. So, calendar rolls will be a major focus of the trade as well.
Have a happy and safe Thanksgiving holiday!
Technical Moving Averages:
Product 50 day 100 day 200 day
SF0 925.25 911.50 917.00
CH0 392.25 400.50 409.25
WH0 510.50 504.75 509.00
KWH0 429.75 436.75 465.50
MWH0 542.75 540.25 559.75
SMF0 305.3 305.5 312.0
BOF0 30.60 29.82 29.70
CLF0 55.55 55.56 57.31
GCG0 1500.0 1495.3 1417.1
LHG0 74.200 73.690 76.025
LCG0 120.010 116.660 117.805
KCH0 104.90 105.30 106.45
CCH0 2516 2436 2405
CTH0 64.16 62.95 67.66
SBH0 12.50 12.58 13.14
JOF0 100.85 103.55 110.60
HGH0 263.90 264.25 273.65
Thanks,
Mike
Michael Clifford
141 W Jackson Boulevard
Ste 1065
Chicago, IL 60604
Trean Group, LLC
312-604-6404