Good morning,
DXH0 99.485 +1.333 GCJ0 1475.5 -11.0 ESM0 2436.00 +30.75 CLJ0 28.98 +0.28
**Just announced, USD 3 month LIBOR up 16.25 bps, biggest jump since 2008**
(equities took a dip into the red on this release, have popped back to the black now)
There is talk of distress in the commercial paper market, which probably can help explain this LIBOR jump. No doubt this story has been circulating for a few days now, and probably played a hand in the emergency central bank meetings and action by the Fed over the weekend.
Another volatile night for equities, as Asia takes prices up sharply (ESM0 was locked limit bid at Europe’s open), only to have prices retreat substantially over the European hours. Oil prices failed above $30 and fell back below, receiving some credit for the stall out in equities. Others point to a soft German investor confidence number, although I don’t see how any negative numbers can come as a surprise these days. Talk of a major hedge fund carrying a large short in European equities, and this money manager being interviewed just after the European open may have also added to the pressure on prices. Gold prices also recovered in the overnight trade, taking a good look above $1500, before also succumbing back below. There are probably more sizable margin calls flowing through the system, and gold appears to be the asset of choice to sell to raise cash.
As would be expected, most commodities were caught in the down draft that swept across most markets yesterday. The combination of selling assets to raise cash, along with the general “risk off” tone in the markets supersedes particular fundamentals. The dollar index is correcting today, and has firmed more on the LIBOR announcement. Many commodities are attempting to stabilize today and trade higher. However, similar to the bounce in equities, the commodity bounce has a “dead cat” feel to it. With all of the uncertainties in the world, suspicion and caution remains as the main emotion surrounding these markets.
More of the same, most markets will remain tied to updates on the coronavirus, and on the global governments response and reaction to controlling the spread of the pandemic.
Technical Moving Averages:
Product 50 day 100 day 200 day
SK0 902.25 925.00 928.00
CK0 384.00 388.00 405.00
WK0 548.00 540.00 528.50
KWK0 474.00 462.75 465.00
MWK0 542.50 541.75 552.00
SMK0 301.1 305.0 310.6
BOK0 31.11 31.78 30.78
CLJ0 50.52 53.94 54.13
GCJ0 1591.5 1542.1 1508.2
LHJ0 67.347 72.344 76.114
LCJ0 117.589 121.664 119.168
KCK0 110.80 115.65 111.95
CCK0 2713 2632 2526
CTK0 67.66 67.50 65.82
SBK0 14.04 13.52 13.23
JOK0 99.20 101.80 106.90
HGK0 263.65 268.05 266.65
HOJ0 164.23 177.94 182.07
XBJ0 162.45 172.51 172.46
NGJ0 1.919 2.087 2.224
Thanks,
Mike
Michael Clifford
141 W Jackson Boulevard
Ste 1065
Chicago, IL 60604
Trean Group, LLC
312-604-6404