Commodity Corner: Morning Comments

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






Michael Clifford


141 W Jackson Boulevard                             

Ste 1065                                                              

Chicago, IL 60604                                              

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