Market Overview

Markets Startings to Price in Higher Rates

Share:

 

Are You An Investor?

Then Get Lido Isle Advisors "Favorite 3"

 Alternative Money Managers Emailed to You

by Clicking Here. Don't Miss It!

 

Equities: The JUN13 emini SP futures have been in a minor retracement of the strong recent rally. This morning, this market is down just .5 points to 1624. We have our first short term downside target at 1614, we would not be surprised to see the market trade lower to this level. We saw some major moves in the markets yesterday, focused on the ripple affect of a strong dollar. With a stronger US dollar, the US stock market could start to move sideways or down a bit. Overall, we still believe the markets are in a longer term uptrend, and we believe the market will finish the year at higher levels than those of today. However, we may be in for a short term downmove.

Bonds: We have seen big moves in the bond markets, notably the Eurodollar futures and the US 30yr treasury bond futures. The JUN13 30yr bond futures got all the way down to 144’17, and are now still trading down over 1 point. This is on the heels of Federal Reserve Bank of Philadelphia President Charles Plosser saying he favors scaling back the central bank’s monthly $85 billion in bond purchases as early as the next Federal Open Market Committee meeting. The Eurodollar futures, which trade in a variety of months and years for expiration dates, allow investors to hedge and speculate on interest rate direction. The DEC18 Eurodollar is down the most today out of the plethora of different dated contracts that are traded. We see 97.50 as the key pivot for this contract. We also would not be surprised to see this market head to the March low of 96.90, and then possibly lower.

Currencies: Yesterday was a big day in the currency markets, with the Yen crashing further and the Aussie dollar falling below 100. Now, the Yen is down 97 more ticks to 98.47, and the Aussie dollar made a big move down to 99.37, but now buyers have brought the Aussie up to 99.83. The US dollar strength is affecting many markets, and it will be interesting to see if the Aussie can really fall much farther like Soros and Druckenmiller say.

Commodities: Crude Oil is down around $2 today on the fear premium caused by the Syria events being sucked out of the market, along with the strong US dollar causing most commodities to sell off. Gold is down big today, trading all the way down to $1410, now rebounding back above $1430. We believe gold will stay below its key resistance level at $1485 and move sideways or possibly head lower from here.

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. TRADING COMMODITY FUTURES AND OPTIONS IS SPECULATIVE, INVOLVES RISK OF LOSS, AND IS NOT SUITABLE FOR ALL INVESTORS.

Are You An Investor?

Then Get Lido Isle Advisors "Favorite 3"

 Alternative Money Managers Emailed to You

by Clicking Here. Don't Miss It!

 

Eurodollar futures

The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Posted-In: Economics Markets

 

Related Articles

View Comments and Join the Discussion!