Natural Gas Plunges

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Monday’s economic calendar lacked market moving news with only
the release of December’s Index of Leading Economic Indicators, which increased
0.1%.

Treasuries sold off for most of the morning before rallying
through the afternoon to close near unchanged. Another $32 Bln of treasuries
will be issued by the US government over the next 3-weeks, starting with $22 Bln
of 2-yr T-notes on Wednesday.

The US Dollar hit a 4-month low versus the Euro after ECB
officials expressed concerns about inflation in the Eurozone and the possible
need for higher rates.

All the energies closed lower, with Natural Gas continuing to be
the weakest market. Warm weather is leading to rising inventories which is
driving prices lower due to the drop in demand. March Natural Gas (NGH6) hit its
lowest level since June last year.

In the metals, Gold (Futures Pivots)
edged higher, boosted by the weaker Dollar. March Copper (HGH6) neared another
new all-time high.

In the softs, Sugar (Futures Pivots)
gapped sharply higher, hitting a new contract high in the first hour before
reversing and selling off for most of the day. Prices still managed to close
above Friday’s high but the chart pattern was pretty ugly. Cocoa continued to
pull back as the situation in Ivory Coast was reported to have calmed.

The grains were mostly flat, except for Corn (Futures Pivots)
which rallied after last week’s selloff.


Economic News

US Dec. Index Of Leading Economic Indicators
Increases 0.1%

Ashton Dorkins

ashtond@tradingmarkets.com