Futures Point To A Strong Open
INTEREST
RATES
OVERNIGHT
CHANGE to  4:15 AM :BONDS -15
Apparently the bond market saw aggressive profit taking off statements from the
Fed yesterday that seemed to cast a favorable view toward the US economy. In
other words, the bond and note markets took the dialogue from Fed members to be
a telegraphed signal for the monthly payroll report this morning. In other
words, the Fed didn’t appear to be overly concerned about a bad number this
morning, but did suggest that jobs would remain a potential problem into the end
of the year.
STOCK
INDICES
OVERNIGHT
CHANGE to  4:15 AM:S&P-80Â
DOW -9Â NIKKEI +115 FTSE +31Â Maybe
the US stock market should take the cue of the US Treasury market, as that
market seems to think that the US payroll report is going to be as expected, or
better than expected. However, we think that the Treasury market is wrong in its
assessment of the coming critical economic report. Certainly one has to give
credit to the bull camp in stocks, as they have managed to forge gains without a
real supportive set of fundamental headlines.
FOREIGN
EXCHANGE
EURO:
Just to keep the heat up on the Dollar today, the euro zone has posted what
appears to be favorable numbers and at the same time is also seeing favorable
sentiment. With France posting a very impressive PMI reading, it isn’t hard to
foster the idea that the Euro zone is growing faster than the US economy. In
fact, given the recent correction in the Euro, to chart support, even the
technicals would seem to be poised to launch the Euro upward. However, if the
Euro fails to hold above 116.35, assume that a surprise failure is taking place.
Otherwise, stay long looking for a rise to May and June highs.
YEN:
The BOJ has to be fearful of the action today. In fact, considering the recent
corrective action in the Yen, the stage should be set to probe even higher price
levels. As mentioned before, we think that the BOJ would be foolish to throw
money at a heavy trading session and therefore they might wait until after a new
high to intervene.
SWISS:
The Swiss is acting poorly on the charts and like the Euro, would not behave
well if key support were taken out at 75.75. We assume the trend is up, but will
expect a major washout if pivot point support is taken out.
POUND:
The UK September services PMI was the strongest since April of 2000 and that
certainly gives the Pound a leg up into a session, where wild ranges could be
seen. In other words, the bias is up in the Pound and the numbers seem to
provide confirmation of the bull trend. However, the Pound is so high on the
charts, that it will need to see weak numbers from the US to move directly to
new highs.
CANADIAN
DOLLAR: The Canadian peaked out above the recent high, in a move that gives the
bull camp needed confidence. We think that the Canadian will finally move to new
highs, as long as the US Dollar isn’t totally coming unglued because of its
numbers.
METALS
GOLD:
From the overnight spark, the gold market appears to have some potential for
gains in the New York session. From the charts, it would seem that December gold
could rally to $389 and not even make any noise on the technical radar. A London
gold analyst suggested that recent slack economic numbers have taken the edge
off the “reflationary” lift in gold but it would still seem like the
gold market has the potential to be lifted by the sagging US Dollar.
SILVER:
Trend line support today comes in at $5.083. While we think that gold will
provide some early positive leadership to silver, we fear the eventual impact of
the monthly payroll report. In other words, the deflationary tilt could be just
enough of a force to pressure December silver below critical chart support and
if that happens, one has to be concerned about aggressive stop loss selling by
the overly long small spec and fund position.
PLATINUM:
The platinum market is peaking out above the recent highs and would not seem to
be affected by the recent weakness in the US economic numbers. In general the
platinum market seems to be garnering strength from the equity market, which
could mean that the platinum market is tracking the stock market not the outlook
for the economy.Â
COPPER:
The big news in the last 24 hours is that copper premiums are being raised in
Europe and Asia. In other words, producers feel that demand is firming enough
that customers will pay higher prices. Apparently due to the holiday in China,
the weekly Shanghai copper stocks have been delayed but it should be noted that
LME copper stocks continued to decline aggressively on the week.
CRUDE
COMPLEX
OVERNIGHT
CHG to 4:15 AM: CRUDE -7, HEAT -10, UNGAS +24Â The energy complex posted an
impressive follow through Thursday and did so without significantly supportive
headlines. We have to think that another day of record or near record cold
temperature contributed to the gains Thursday.
NATURAL
GAS
The
weekly injection report showed a slightly bigger build than the bull camp would
like to have seen. The annual supply deficit also narrowed to 250 bcf, which is
a significant narrowing and therefore bearish to prices.