Bonds Blunder But Bounce Back
T-bonds [USZ9>USZ9] tumbled to a new contract low in reaction to comments by European Central Bank Chief Issing that inflation may return to Europe as the economy strengthens on the continent.
The December contract (which registered on the Implosion-5 List)
fell more than a half-point to a new low of 110 12/32 early, then recovered to close up 1/32 at 111 0/32.
Stock index futures got bogged down by the decline in bond prices. From the Pullback Off Lows List, December Dow futures [DJZ9>DJZ9] and S&P futures [SPZ9>SPZ9] fell 113.0 and 6.30, respectively. NASDAQ 100 futures [NDZ9>NDZ9] traded on both sides of Friday’s closing level and managed to finish up 3.50 at 2500.00.
December dollar index futures [DXZ9>DXZ9] fell .16 to 98.15, closely paralleling the move in equities. The Japanese yen [JYZ9>JYZ9] rose .0059 to .9564 and British pounds [BPZ9>BPZ9] rose .0064 to 1.6636. The Canadian dollar [CDZ9>CDZ9] rose .0023 to .6801, recovering from a lap-down open.
Energy contracts began the session higher but finished down on the day. December crude [CLZ9>CLZ9] fell .10 to 23.35, unleaded gas [HUZ9>HUZ9] fell .0065 to .6411 and heating oil [HOZ9>HOZ9] fell .0048 to .6102. Natural gas also trimmed .061 to close at 3.122. [NGZ9>NGZ9]
In the metals, December gold [GCZ9>GCZ9] continued its steady slide, losing another 2.8 to 300.5. Silver [SIZ9>SIZ9] gained 1.3 to 526.3 and copper [HGZ9>HGZ9] came off a ten-day high to settle .80 lower at 80.95.
The grains rallied after sellers failed to take the market to new multi-month lows. November soybeans [SX9>SX9] made good on their Turtle Soup Plus One Buy signal, rallying 6 to close at 478 3/4. December soymeal [SMZ9>SMZ9] also gained 3.0 to close at 150.4. Wheat [WZ9>WZ9] rallied 4 and corn [CZ9>CZ9] moved 2 1/4 higher to 201 3/4.
Livestock contracts tumbled more than 1.6% each today to one-month lows. December lean hogs [LHZ9>LHZ9] hit three-month highs briefly before retreating and ending down .800 to 48.450. February pork bellies [PBG0>PBG0] also fell 1.175 to 63.650.
Two soft contracts rallied more than 5%: March sugar [SBH0>SBH0] gained .37 to close at 7.25 and coffee [KCZ9>KCZ9] climbed 6.85 to 99.75. Cocoa [CCZ9>CCZ9] plummeted for a fourth consecutive session falling 30 to a contract low of 862.