The Buck Bucks
The dollar is trading at a 10-day high as the yen, euro and
Swiss franc slump on buyout and bankruptcy news.
The Swiss franc is trading sharply lower on news that Swiss
bank UBS is buying out Paine Webber for $10 billion. The euro FX, highly
correlated with the franc, is following suit.
In a sign that the Japanese economy remains in trouble,
retail giant Sogo filed for "court-rehabilitation." The yen is trading
sharply lower on the news. Economic failures of major business entities give the
Bank of Japan less leeway to increase interest rates. Low interest rates are a
year-long BOJ policy aimed reviving a lagging Japanese economy. Lower interest
rates make holding yen-denominated assets less desirable than higher
interest-bearing assets in other countries.
A huge net in-flow of meat into CME cold storage–when the
market was expecting a net-outflow–has locked pork bellies limit-down. This
comes one day after lean hogs fell their daily limit.
Wheat has broken down to new contract lows following a USDA
report that showed a higher carry out of wheat stocks. Wheat, the contract with
the second-most downside momentum as defined by the
Implosion-5 List, is
leading the grains lower. Also from the Momentum-5 List, corn and soybeans have
also touched new contract lows.