Futures Market Technical and Fundamental Recap
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Today's Futures Analysis summary
Treasury yields fell toward the end of the week following a volatile break in the June Bonds and June Notes. Yields are rising over concerns the U.S. will lose its AAA debt rating and concerns that the U.S. government will not be able to finance its growing debt.
Money is leaving the fixed income markets and looks like its moving to the equities. A strong surge to the upside on the close on Friday is a sign that stocks may attempt to break out of the range it has been in for the month.
The U.S. Dollar was hammered all week against most major currencies. Traders are selling the Dollar for two reasons. The first is increased appetite for higher yielding assets. The second is concerns the U.S. debt burden will weaken the economy.
The weaker Dollar encouraged heavy buying in all metal contracts this week. August Gold and July Silver were up on speculation that inflation will spike. July Copper was up on more buying from China and the prospect of a global economic recovery. July Platinum posted strong gains in anticipation of a recovery in the auto industry.
Increased demand for energy because of the prospect of an economic recovery helped to drive July Crude Oil higher. News that OPEC was not considering a production cut should have been bearish news, but a comment from an OPEC minister about the possibility of new demand led speculators to add to their long positions.
July Soybeans are hesitating near the 12.00 area despite a weaker Dollar. Increased demand got the market this far, but traders must feel the price is too high at this time.
Corn planting is probably over which means speculators may know the final crop estimate. Based on the strong rally late in the week, it looks as if traders believe the crop will be smaller than previously estimated.
July Cocoa surged to the upside this week as foreign investors gobbled up cheaper Dollar priced cocoa. The sudden surge in the British Pound has made cocoa in London relatively expensive.
Traders are trying to figure out what a ban on forward contracts by India will have on July Sugar. India is trying to curtail excessive speculation which has driven prices extremely high. Traders have backed off from buying, but there has been no evidence of any selling at this time.
By FuturesHound.com the portal for Analysis, Education and exclusive timely market Gann Analysis .
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