A
Labor Department report today showed jobless claims decreased by 11,000
to 346,000 in the week ended June 1. The Chicago Board Options Exchange
Volatility Index, or VIX, fell 0.7 percent today to 17.37.
Equities: The
JUN13 emini SP 500 is trading at approximately unchanged levels at
1608. The daily pivot point for this market is 1615, and the key
downside target in our view is 1595. Tomorrow’s US jobs report could
have a big effect on this market. If there is a slightly higher than
expected number, we think the market may make an initial burst higher,
but then come right back down because at this point it seems that better
economic numbers means sooner tapering of the stimulus.
Bonds: The
bond market is very quiet today, which is somewhat normal on the day
before a big monthly jobs report. We would not be surprised to see a
large downmove in the bond market if the jobs # comes out much higher
than expected. We also are watching our target of 9842 downside target
for the MAR16 Eurodollar interest rate futures. The JUN13 US 10yr note
is trading down 2 ticks to 130.16.
Commodities: Gold
is up $4 to $1402, and Crude oil is up 1.6% to $95.25. As we have been
saying, crude has been seeming to be very resilient, not being able to
stay below the $92 level. It is interesting to see this market act so
strong, even in the face of a lot of data indicating big supply. Perhaps
yesterday’s low supply # shocked the bears and we are seeing some short
covering. We are also seeing Natural Gas take a dive today, down $.13
to $3.87. The price decline comes on the back of a report showing a
bigger-than-expected climb in last week’s U.S. supplies.
Currencies: The
Euro currency has exploded to the upside after the closely watched ECB
meeting, which indicated a potential pick up in the recovery towards the
end of this year. The market took this as very Euro-positive news,
combined with Latvia joining the Euro. Thus, the euro currency broke
through the key 131 level and is now trading up 100 ticks to 131.87. Our
key pivot level for this market is 131.15. We are also watching the
Aussie dollar retrace all of last night’s losses and climb back to
unchanged levels from yesterday’s close. Even though we believe the
Aussie is in a down trend, we could see more short covering today and
tomorrow.
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