Futures Point To a Weak Open
INTEREST RATES
OVERNIGHT
CHANGE to  4:15 AM :BONDS +5 The Treasury market doesn’t seem to be too
defeated from the action Thursday, when the initial and ongoing claims caught
the market overbought. The fact that equity prices managed to recover in the
wake of the improvement in the ongoing claims readings, could really have caused
longs to bail out of bonds and notes but the trade held together better than
would have been expected. We still think that the up trend tilt is present in
the market and with the economic report slate empty again today, we suspect that
the bulls will have the benefit of the doubt.
STOCK INDICES
OVERNIGHT
CHANGE to  4:15 AM:S&P-180 DOW -12 NIKKEI +10 FTSE +7 The stock market appeared
to be bailed out from the recent slide by favorable US ongoing claims readings
Thursday but in the end, profit taking sentiment wasn’t completely eradicated.
While the stock market hasn’t really benefited from favorable earnings, reports
it apparently is in a weak enough posture that slightly disappointing earnings
are capable of prompting selling. In fact, the initial reaction to Microsoft
earnings overnight, are a good example, of a market simply looking for negative
news in the headlines.
FOREIGN EXCHANGE
EURO: We
think that support of 117.39 will hold and that the Euro is primed to work
higher. However, a failure to hold above 117.20 would be extremely damaging to
the Euro. We just can’t get the economic information to be comfortable with long
euro plays. Therefore, those that want to be short the Dollar should consider
the Pound instead of the Euro. In fact, with the Euro zone current account
surplus shrinking and the trade balance thought to be going away, the
fundamental look to the Euro is negative. The only thing keeping the Euro up, is
the fact that the Dollar trend is down. Therefore, the Euro lags behind other
currencies on upside moves.
YEN:
Negative Japanese department store sales (18 straight monthly declines)
certainly undermines the Yen. Even grocery store sales slid. In fact, the Yen
would be under more pressure if it were not for the expectation that September
Industrial production will increase. As long as the Yen doesn’t climb back
above 91.64 the near term trend might be considered down.
SWISS:
The Swiss seems poised to move to a new higher level but might have to dip back
to 76.15 first. The Swiss will simply follow the Pound in the coming week’s
trade.
POUND: A
strong upward probe overnight was unable to hold, suggesting that the Pound got
a little ahead of itself. However, we think the fundamental track supports the
Pound to even more gains ahead. GDP and retail sales numbers should foster more
buying in the Pound because other G7 countries have set a very low macro
economic bar.
CANADIAN
DOLLAR: The trend continues in an extremely well defined manner. As long as
nothing wild happens in the Dollar, the Canadian should not be discouraged from
even more gains ahead. Support is 76.23, resistance at 76.85. +
METALS
GOLD:
Since the US Dollar tested new low ground Thursday, the gold bulls could be
given fresh impetus and therefore December gold will probably be able respect
close-in critical chart support of $383.3. We are a little surprised that the
Asian gold market was positively influenced by the recent sharp decline in the
Nikkei and the weakness in the Yen and that is a sign that gold traders are
interested in gold for more than just one theme. Seeing interest in gold, in the
face of sagging economics, shows that the flight to quality buyers are mixed in
with the Dollar players but the market is still missing a strong demand threat
from the physical market.
SILVER:
Despite a lack of news, the silver market has added significant gains this week.
Also of note is that silver prices have soared in the face of a marked increase
in COMEX silver stocks. With the COMEX tally at 115 million ounces, near term
supply should be assured.
PLATINUM:
The platinum markets looks to be in a corrective posture this morning. We doubt
that the news from Russia is responsible, as the Russians promised to fully
disclose their PGM statistics in 2 years and that hardly changes the landscape.
We think the Russians are balking at releasing the data because that would prove
they basically sold their reserves over the last 4 years and that is why less
supply is coming out of the country. It would be our opinion that they are
attempting to ramp up production or round up supplies in an effort to show up
with some buffer in 2 year. In the mean time, platinum is overbought and
vulnerable but the market has been very willing to buy breaks. Near term support
in the January platinum contract comes in at $732.8 and then again at $729.5. Â
Shanghai
copper stocks decline by 4,330 tons and that should help to cushion the copper
in the current corrective COPPER: swing. As we suggested yesterday, the copper
market was due a multi-day correction off the return to full production talk and
because the market was extensively overbought technically. Therefore we expect a
slide down to 88.75 and possibly to 87.70, especially when the market gets a
look at the COT report positioning after the close.
CRUDE COMPLEX
OVERNIGHT
CHG to    4:15 AM  :CRUDE +19 ,HEAT+68 ,UNGAS+113 The crude oil market
slumped early Thursday but did manage to finish the session moderately higher
and pointing to even more gains ahead. Certainly the macro economic outlook
improved and weather seemed to turn a little more bullish.
NATURAL GAS
The
weekly injection came in at 84 bcf and that was slightly above expectations of
60 to 80 bcf. However, the annual supply deficit shrank to 133 bcf and the
working storage moved above 3 trillion cubic feet to 3.028 trillion.