Are Interest Rates Heading Higher?
US treasuries closed at the lowest
level in more than two months, pushing yields higher. The US
10yr T-note
(
TYU5 |
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Chart |
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PowerRating) -0.59% hit it’s lows after the Chicago NAPM report
was released and GDP showed continued expansion of the US economy. Yields on
both short term and long term treasuries rose as the bond market bet the Fed
will continue to raise interest rates.
Tight supplies and increased demand combined with a fire at
BP’s Texas City refinery, the third largest in the US, helped push oil prices
higher. The US Senate passed the Energy Policy Act 2005 by 74 votes to 26. The
legislation is seen as a top priority by President Bush and places increased
production and greater efficiency at the center of US energy policy.
Crude Oil
(
CLU5 |
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News |
PowerRating) +1.05% hit a high of $61.05
earlier today before settling at $60.57. Natural Gas
(
NGU5 |
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Chart |
News |
PowerRating) +2.48%
continued to outperform, once again leading the energy sector higher.
Gold
(
GCZ5 |
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News |
PowerRating) +0.58% closed at it’s highest level
since 06/30/05 and Platinum
(
PLV5 |
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PowerRating) +1.41% hit a new contract high in
a strong precious metals sector.
Pork Bellies
(
PBQ5 |
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News |
PowerRating) -2.53% closed limit down as
the overbought nature of the market was finally too much to overcome. Feeder
Cattle
(
FCQ5 |
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PowerRating) +1.53% hit a 10-day high and Live Cattle
(
LCV5 |
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News |
PowerRating) +1.65% hit a 15-day high. Both formed wide-range days and the
charts suggest higher prices ahead.
Soybeans
(
SX5 |
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PowerRating) -1.51% and Corn
(
CZ5 |
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Chart |
News |
PowerRating)
-1.49% gave back most of yesterday’s gains as the entire grains sector closed
lower.
Cocoa
(
CCU5 |
Quote |
Chart |
News |
PowerRating) +1.58% closed at it’s highest level
this month and Coffee
(
KCU5 |
Quote |
Chart |
News |
PowerRating) +1.43% closed at a new 10-day high.
Economic News
Employment Cost Index: Q/Q Change – Actual 0.7% Consensus 0.8%. Y/Y Change
Actual 3.1%
Real GDP: Q/Q Change – Actual 3.4% Consensus 3.5%
GDP Deflator: Q/Q Change – Actual 2.4% Consensus 2.7%
Consumer Sentiment Index: Actual 96.5 Consensus 96.5
NAPM Chicago: Business Barometer Index – Actual 63.5 Consensus
55.0
Ashton Dorkins