Futures Market Technical and Fundamental Recap
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Today's Futures Analysis summary
June Treasury Bonds continued their downtrend as the U.S. Treasury began another round of auctions which added to the already burgeoning supply of debt. Traders are especially shying away from the long dated side of the market because of the fear of inflation.
The sudden rise in interest rate yields since the beginning of the month is leading to speculation the Fed may have to increase its quantitative easing activity. Tuesday’s surprise increase in U.S. Consumer Confidence also sent out a signal that the U.S. economy may be recovering at a faster rate then previously forecast
Stock indices surged to the upside following the release of a bullish U.S. Consumer Confidence report. Short-covering may have triggered this rally after stocks opened sharply lower following an overnight sell-off. The key to sustaining the support in the June S&P 500 is holding 875.00. Look for selling pressure late in the week.
The Dollar was mixed against most majors on Tuesday. Last week no one wanted the Dollar, this week, traders were treating it as a safe haven currency once again. Bad news regarding toxic debt may hurt the June Euro. Higher equity prices and crude oil should be supportive for the June Canadian Dollar. It looks as if traders are favoring a lower Yen now that the Bank of Japan has expressed its concern over price volatility.
Tuesday was most likely a counter-trend day for the precious metals. Fear of inflation has been providing support for June Gold and July Silver. The falling Dollar and fear of higher interest rates is helping to drive speculators to seek projection against an inflated Dollar. Watch the Dollar for direction this week. If the Dollar becomes the go to currency this week then look for downside pressure on gold.
July Crude Oil may break if OPEC presses on with its desire to keep production at current levels. OPEC ministers really cannot cut production any more out of fear it will help stall the global economic recovery. A stronger Dollar will be bearish for crude.
July Soybeans are being supported by positive supply and demand fundamentals. The falling Dollar combined with low production out of South America and increased demand from China has been supporting the current rally. A weather scare could encourage even more buying to push prices higher.
Low supply and a weaker Dollar are helping to drive July Coffee prices higher. Because of the break out to the upside, speculators have also been chasing this market to take advantage of the bull market. Demand is expected to outstrip supply if the Dollar remains weak.
By FuturesHound.com the portal for Analysis, Education and exclusive timely market Gann Analysis.
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