Futures Point To A Flat Open
INTEREST RATES
OVERNIGHT CHANGE to
04:14 AM
Bond prices exploded to the upside Thursday and held on to gains over night as
several factors have come together to make for a bullish environment for
bonds. First of all, comments by St. Louis Fed President William Poole
indicated the Fed was likely to keep rates low as long as growth remained
moderate and that the unemployment rate could drop to 5% before seeing any
inflation pressure.
STOCK INDICES
OVERNIGHT CHANGE to
04:14 AM
YEN+7, SF+33, CA+19, EU+53Â
Dollar:
Broad based negative sentiment continued to pressure the dollar over night and
at this juncture, besides concerted intervention, there seems little in the
way that would reverse the well entrenched down trend. The acceptance of a
weaker dollar by the Fed, the market’s discounting of strong US economic data,
escalating geopolitical tensions and terrorist threats have all conspired to
weaken the US currency. The close under 92 sets the Dec dollar up for a test
of the October lows at 91.23.
FOREIGN
EXCHANGE
EURO:
The market is garnering support from a weaker dollar rather than any
significant improvement in the Euro-zone economy. German Oct CPI was + 1.2% on
an annual basis which was in line with expectations. With another downward
push in the dollar likely, the Dec Euro will likely be pushed to test the
October highs at 1.1842.
YEN:
The Yen is being dragged higher by the rest of the currency market and despite
intervention threats and heavy profit taking in the Nikkei over night, Dec
futures are likely to creep higher with the next target at 92.93. The Yen
gained in over night trade as
3qtr GDP came in at +.6% VS +.9% 2Qtr03, which was above market expectations.
SWISS:
The Swiss saw solid gains despite weakness in the gold market, which means
action in the Dollar dominates trade. A move above resistance at 75 opens the
upside for the Swiss to 75.87 level.
POUND:
With interest rates heading higher even the Pound is capitalizing on the
dollar weakness and not being bogged down by the problems in
Resistance is at 169 then 169.40.
CANADIAN DOLLAR: While the Dec Canadian ran into some resistance above 77, the
market did not give back too much ground. There are growing concerns that the
sharp gains in the Canadian currency will hurt the country’s exports and that
the Bank of Canada may cut rates to slow the currency’s assent. However, given
the recent string of strong economic reports, we doubt the BOC would be
willing to cut rates to try and manipulate the currency. Gains may be more
cautious due to BOC rate cut fears. A move to 77.50 is still in play.
METALS
OVERNIGHT CHANGE to
04:14 AM
SLV-0.50, PLAT+5.70Â London A.M. Gold fix $395.35 – $.15 LME COPPER STKS
497,650 tons -3,075 tons COMEX Gold stocks 2.963 ml -225
Comex Silver stocks 120.2 ml oz + 607k
OVERNIGHT: Gold inched higher in
and
overnight as the falling dollar helped to support pric
GOLD:
After a $21 run in just 5 trading sessions, the market is overbought and the
technical failure at the first run at psychological resistance at $400 should
not be a big surprise. The reversal from a contract high, however, does not
have the normal characteristics of a top and we would keep $415 in Feb gold as
next upside objective. The reversal lacked the volume or range to be too
concerned.
SILVER:
The silver market is a follower and does not have the same bullish luster as
gold, but should tag along on the next leg up. For now, however, there could
be some increased profit-taking after the technical failure yesterday.
Exchange stocks are high and traders will monitor the COT report closely
tonight.
PLATINUM: The market remains in a classic uptrend channel and moved to a new
23-year high yesterday with the strength in the other metals as a new positive
force. The next swing objective for January platinum comes in at 778.50 with
766.80 and 755.10 as key support levels. Â
COPPER:
warning flag to the aggressive bull. For the week ending November 13th,
stocks were up 1,011 tonnes to 133,207
tonnes.
Escondida mine (worlds largest) indicated October
production at 88,600 tonnes, up 41.6% from last
year.
CRUDE COMPLEX
OVERNIGHT CHG to 04:14 AM:CRUDE+22, HEAT+55, UNGAS+73Â Energy markets came
raging back after an early price dip off the API/DOE data, which the market
initially took to be slightly negative, but on closer inspection the report
had bullish elements. January unleaded gas took leadership of the complex
rallying to new contract highs.
NATURAL GAS
The
strength in the rest of the complex and the forecast for colder temperatures
over the weekend helped to spark short covering in the natural gas market
despite a bearish stocks report. The funds hold a huge net short position in
nat gas and since the
32 bcf rise in stocks failed to push Jan
nat gas prices through support, the funds decided
to book some profits.