Help! Is There A Financial Analyst In The House?
In one of his inaugural acts, Japan’s newly elected Prime
Minister Junichiro Koizumi appointed a financial novice, Masajuro Shiokawa, to the
key financial minister post. The yen had gained ground off its April 2 contract
lows on hopes that a new government and the “reformist-minded”
Koizumi could begin making desperately needed structural changes to revitalize a
Japanese economy stymied by 10 years of stagnant growth.Â
But the idea of placing someone with no experience at the
financial helm of the word’s second largest economy spooked currency traders who
sent the yen down .0067 to .8167. Japan is mired by an entangled accounting
system, an inefficient network of corporate alliances, and untold bank debt.
This is not the place for on-the-job training.Â
In other currency futures trading,
euro FX futures
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expected, held short-term interest rates steady at 4.75%. The comparative
Federal Funds rate in the US is now 4.50%. The ECM1 gained .00750 to .90340
while
June dollar index futures
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Recent Momentum-5
market
Canadian dollars
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above their four-month lows in a signal that the brutal selling that has taken
the June contract down seven full points in one month may, at least temporarily,
abate. T-bonds’Â 29/32 rally left an engulfing (outside day) at low, a
technical pattern indicative of a bounce. Traders responded to the biggest gain
in the number of workers filing for unemployment benefits in five years. The
perception here is that, although there have been recent signs of economic
recovery, a growing number of unemployed workers will keep economic activity
slow and should keep the Fed on the offensive in cutting interest rates to
stimulate growth (higher bond prices equate to lower interest rates).Â
June crude oil
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played catch up with the recent leader in the energies — unleaded gasoline
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Crude was the biggest percentage gainer in the energy complex, rallying after last night’s APIs showed supplies of crude fell half a
percent, their first drop in seven weeks. Part of the reason for the drawdown
in supplies was due to higher demand by refiners who “cracked” crude into
gas and distillates at their fastest pace in seven months. Refiners have an
incentive to do this: cracking margins are expanding and stand at $17 a
barrel.Â
The leading contract on
the Momentum-5
List, June unleaded gasoline, also gapped
higher and closed at a contract high, up .0175 at 1.0300, riding the coattails
of strength in crude.Â
A combination of
multiple, positive signals got stock index futures off to a positive start. Nasdaq 100 futures
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S&P futures
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all registered on either the Momentum-5
or Pullback From High
lists. Also, a positive Connors VIX Reversal I and TRIN reading from the
Market
Bias Indicators Page suggested equity futures could rally. Dow and S&P
futures added 57.0 and 8.50, respectively. Naz futures succumbed to an
intraday head-and-shoulders top to close down 50.00 at 1774.00.
May pork bellies
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their near-limit-down move yesterday in the wake of Japan’s partial lifting of a
ban on European meat. Bellies triggered their Turtle Soup Plus One Buy
signal, an occurrence pointed out in the Mid-Day Futures Alert, and
continued rallying to close on their highs, up 1.125 at 84.900.
In the softs, July sugar
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