NAPM Nixes T-Bonds
A report from the National Association of Purchasing Management showing unexpected manufacturing strength and rising materials prices rekindled inflation worries and the perception the Fed will raise interest rates before the end of the year. December T-bonds [USZ9>USZ9] closed at a life-of-contract low, dropping more than a full point to 112 27/32.
Falling T-bonds dragged down stock indexes: From the Implosion-5 List, December Dow futures [DJZ9>DJZ9] fell 104.0 to 10,331.0, the S&P futures [SPZ9>SPZ9] ended 4.20 lower at 1294.00 and NASDAQ 100 futures [NDZ9>NDZ9] ended down 3.75 at 2434.75.
December dollar index futures [DXZ9>DXZ9] took a beating as European currencies rallied on the idea interest rates will go higher on the continent and Japan’s economy and stock market will improve. A Multiple Days Low Volatility reading for the dollar and Swiss franc [SFZ9>SFZ9] suggested the currencies would make larger-than-normal moves and the dollar’s standing on today’s Implosion-5 List indicated that its direction would be down. The dollar fell to a 50-day low as Swiss francs rallied to close at the top of their range and at a 20-day high of .6813 for a gain of .0080. British pounds [BPZ9>BPZ9] also gained .0080 to close at 1.6544.
Besides an improving economic outlook, the Japanese yen [JYZ9>JYZ9] benefited from news that their worst nuclear accident in history is contained. The December contract rose .0133 to .9633.
Energies finished narrowly mixed in an uninspiring session: November crude [CLX9>CLX9] fell .04 to 24.47, unleaded gas [HUX9>HUX9] fell .0042 to .6908 while natural gas [NGX9>NGX9] gained .046 to 2.790.
Dave Landry made the point in his HREF=”https://tradingmarkets.com.site/eminis/indicators/dailystats/M5LT.cfm”>Futures Trading Outlook that commodities in fast moves sometimes only consolidate for a few days before heading higher. December gold [GCZ9>GCZ9], from the
Momentum-5 List, popped as much as 10.0 higher before finishing with a gain of 5.8 at 305.3. Silver [SIZ9>SIZ9] fell 3.3 to 558.2.
Grain contracts took a slide today and soybean contracts tipped their hand by registering on the Implosion-5 , the Pullback Off Lows and the
Multiple Days Low Volatility lists. November soybeans [SX9>SX9] fell 10 1/4 to 481, December soybean oil [BOZ9>BOZ9] dipped .13 to 16.59 and soymeal [SMZ9>SMZ9] lost 3.6 to close at 148.7. Wheat [WZ9>WZ9] and corn [CZ9>CZ9] also declined to 2-month lows, falling 8 3/4 and 3 1/4, respectively.
Cattle and pork contracts also came up on the Momentum-5 List: October live cattle [LCV9>LCV9] and feeder cattle [FCV9>FCV9] broke to contract highs and lean hogs [LHV9>LHV9] rallied 1.400 to 50.375.
December coffee [KCZ9>KCZ9], also a member of today’s Implosion-5 List, fell to contract lows, losing 1.10 to 81.35.