Commodity Corner: Morning Comments

Good morning,


DXH0  97.710  -1.194             GCJ0  1470.8  -45.9                                          ESH0  2567.50  -1268.50 (locked limit down)                CLJ0  29.41  -2.32


March Madness has taken on an entirely new meaning this year.  The NCAA tournament “Selection Sunday” was replaced by the Federal Reserve and the other central banks of the world conducting “Rescue Sunday”.   Global central banks held emergency conference calls, and the Fed moved up the timeline for this week’s meeting to this past weekend, and decided to cut short term rates by 100 basis points, to almost 0%.  They also announced an asset purchase program of $700B on US Treasuries and mortgage backed securities.  This was followed by the BOJ and RBA both announcing further increases to quantitative easing programs.  The PBOC also injected liquidity into the system.  Other central banks are believed to be on board as well with offering any additional support to aid the global economy.


The dollar has been under attack with this aggressive move from the Fed.    


Chinese economic data released overnight was very negative, no real surprise, but none the less possibly an eye opener for what implications could be in store for the rest of the world as this pandemic works its way through the system.  More restrictions on travel across countries and the US closure of schools, many businesses, restaurants and bars has added to the level on panic sweeping the globe. 


Most markets are once again feeling the pain from this pandemic with much lower prices.  Gold, which usually would be the safe haven in all of this, is the market that appears to be most under attack, having dropped almost $60 on the lows.  Equity implosion and central bank easing would usually be very supportive for gold.  However, as margin calls increase, gold appears to be the asset of choice to sell, in an effort to raise cash to meet margin requirements.  US Treasuries, and other fixed income markets are the benefactors, especially with all of the announced QE.


Oil prices are down over $2, as a large decrease in global demand can be expected, especially with the Chinese data released.  The same is true for most commodity markets.  Volumes have been below average today, in part due to the illiquid conditions in the market and in part due to many global trading teams in the process of getting set up at remote locations.  The next few days in the market will be very choppy, and a work in progress for all. 


Stay dialed in for new announcements, regarding monetary and fiscal policy changes, along with new developments from the virus.  As more tests are being are being administered, it should be expected to see a spike higher in the numbers for positive before things flatten out and start to abate.  Thus, the fear factor is far from over and these markets will remain in disarray for some time.       


Technical Moving Averages:

Product               50 day                100 day               200 day

SK0                       910.25                   926.50                   928.75

CK0                      385.00                   388.50                   405.50

WK0                     549.25                   540.50                   528.75

KWK0                  475.50                   463.00                   465.75

MWK0                 543.50                   542.25                   552.50

SMK0                   301.3                     305.2                     310.8

BOK0                   31.32                     31.84                     30.80

CLJ0                     51.15                     54.18                     54.26

GCJ0                    1592.5                   1542.2                   1507.4

LHJ0                     67.830                   72.650                   76.260

LCJ0                     118.280                 121.955                 119.290

KCK0                    111.30                   115.65                   112.00

CCK0                    2717                       2634                       2527

CTK0                    67.89                     67.57                     65.88

SBK0                     14.08                     13.54                     13.24       

JOK0                    99.30                     101.90                   107.00

HGK0                   264.55                   268.35                   266.80

HOJ0                    166.15                   178.74                   182.51

XBJ0                     89.75                     173.54                   173.00

NGJ0                    1.925                     2.092                     2.228





Michael Clifford


141 W Jackson Boulevard                             

Ste 1065                                                              

Chicago, IL 60604                                              

Trean Group, LLC