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Thursday, August 31, 2006

FX Closing Comments

FX markets jostled around some today, but at the end of the day, prices keep essentially flat ahead of tomorrow's non-farm payroll. Consensus opinion is calling a figure between 120K - 140K. Today's data was, on the whole, mixed, with factory orders down and the Chicago PMI slipping. More optimistically, non-transportation factory orders were rather robust at 1.1%. Inflation was mostly unchanged, with consumer spending up and savings down. The more telling number, however, will be tomorrow's jobs report. A soft figure, say below 100K, may well initiate a bout of Dollar selling. If, on the other hand, the number surprises to the upside, look for Dollar gains against Yen, more so than the Euro, which has been deadlocked for some time. The Dollar has also not benefited from the latest spat of Yen weakness and could be due for some catch-up.

Markets to Watch Today

Crude-Oil: Crude-Oil futures reversed early losses to end the day slightly higher. Anticipation of a strike in Nigeria, Africa’s biggest oil exporter was behind the reversal. The strike threat is over demands for increased security in the Niger Delta, after an increase in oil-worker kidnappings. Also providing support was a pass in the UN deadline for Iran to halt its nuclear program. The October Crude-Oil contract settled up 32 cents at $70.03 a barrel.

Wheat: Wheat futures rose as a result of technical buying, combined with news of a reduction in Poland’s wheat crop. This buying moved the Wheat market to 3-week highs, continuing a 10% rally since mid-August. September Wheat settled up 17 cents at $3.9750 a bushel.

Gold: Gold futures rallied yesterday, supported by strength in the Euro. Trading conditions were thin as the September Gold contract rose $7 to settle at $617.70 an ounce.

GBP/USD: Nearing Yearly Highs

FX trading seems to be getting less range-bound than in previous weeks, signaling that the summer lull may be coming to an end, although price action remains subdued. Yesterday, the focus was on the EUR/JPY, which managed to break through the Y150 level (currently at 150.60), and on the Pound, which broke north of 1.90 against the Dollar. The momentum for Sterling came in response to an unexpected jump in the August CBI sales index, or Confederation of British Industry, which contained a big upside surprise, leaping from +12 from +7. Read More....

Gold Poised For A Breakout?

Gold poised for a breakout? Traders in the Gold futures market have been lulled to sleep, as the summer doldrums continue. December Gold has been caught in a $25 trading range for the past 10 days, as both bulls and bears try to establish control. Currently, it's been a battle between speculators who are net-long Gold, and commercial hedgers who are short the market. Read More....

Wednesday, August 30, 2006

Fried Rice!

Fried Rice! A bearish USDA quarterly rice stocks report weighed heavily on Rough Rice futures today, with the most active November hitting five-month lows. This morning's report announced that Rice stocks are up 18% this year, with all Rice stocks totaling 37.4 million hundredweight as of August 1st. Floor sources deemed the report bearish, and the market agreed, plunging on speculative liquidating and triggering sell-stops as prices moved through support at 9130.00. The Rice market was already reeling from concerns that a small amount of genetically modified long-grain rice was found in some storage bins in Missouri and Arkansas. Read More....

FX Closing Comments

FX trading is perhaps less range-bound than previous weeks, although price action remains subdued. Today, the Pound was the biggest mover, while the Yen continued to be under pressure. The Dollar Index was essentially flat at +9. It is notable that the Pound moved above the 1.90 against the greenback. Some of the positive Pound sentiment came from the August CBI sales index, which contained an upside surprise, leaping to +12 from +7. The market was looking for a dip to +5. A lot of data in store for tomorrow, most notably the core PCE deflator (expect +2.4%) and factory orders (expect 1%).

Sugar Not So Sweet!

Sugar not so sweet! That is what bullish traders are thinking lately, with the October contract falling to nine-month lows. Lower energy prices have taken some of the steam out of the Sugar market, with lower Ethanol prices taking some of the bullish enthusiasm out of Sugar. In addition, world Sugar supplies are expected to shift to a surplus this year, as bumper crops are expected from Thailand and India. Commodity funds were the biggest players in Sugar futures the past several months, holding well-over 100,000 net long positions at the peak of the bull market. Read More....

The Dollar Saw Some Action Yesterday

The Dollar saw some action yesterday, spending most of the day under pressure. The first sign of trouble was the August consumer confidence report, which dipped to 99.6, when most were expecting a more modest slide. Oddly, the soft confidence data provoked a bout of Dollar buying directly after the release. Later in the day, however, it was the FOMC minutes that sent the Dollar southward. Read More....

Markets to Watch Today

Crude-Oil: Crude futures closed at their lowest level since June 20, as Tropical Storm Ernesto continued to veer away from the Gulf of Mexico. The October Crude Oil contract fell 0.90 cents to settle at $69.71 a barrel.

Cotton: Cotton futures rose slightly on speculative buying yesterday. Expected rainfall coming from Tropical Storm Ernesto was attributed to the buying efforts. October Cotton gained 0.17 cents to settle at 53.35 cents a pound.

Sugar: Sugar futures fell to nine-month lows yesterday. The speculative selling was based on expected damage to Florida’s cane fields from Tropical Storm Ernesto. The October Sugar contract fell 0.25 cents to close at 11.88 cents a pound.

Tuesday, August 29, 2006

FX Closing Comments

The Dollar fell back today in a rather counter-intuitive day. In the morning, poor consumer sentiment sent the Dollar higher. In the afternoon, the release of hawkish Fed minutes, sent the Dollar sharply lower. We still have inflation data and non-farm payrolls to come and another re-shuffling could be in store. Overnight, we'll see Japanese retail sales figures for July, which could add additional pressure to a Yen that has suffered poor sentiment in recent sessions.

Cattle Keeps Mooovin' On Up!

Cattle keeps mooovin' on up! Live Cattle futures continue their stampede higher, as strong cash prices and bullish chart patterns keep the buyers coming. August Cattle and several back month contracts all posted contract highs yesterday. Traders are optimistic that beef exports will pick-up, forcing cash prices to catch-up and close the nearly $4 discount to October futures prices. Read More....

The Summer Lull Continued In The FX Pairs Yesterday

The summer lull continued in the FX pairs yesterday, though the week's remaining data has the potential to shake things up. Today, analysts will get a chance to preview the minutes to the last Fed meeting, which likely will reveal that the decision to pause was a difficult one. Thus far, however, it seems not to have backfired. Since their last meeting, the new data has supported their overall theory that housing will continue to slide, contributing to a consumer-led slowdown and putting downward pressure on inflation. Read More....

GBP/JPY Reaching Highest Level Since 1998

The summer lull continued in the FX pairs yesterday, though the week's remaining data has the potential to shake things up. Today, analysts will get a chance to preview the minutes to the last Fed meeting, which likely will reveal that the decision to pause was a difficult one. Read More....

Markets To Watch Today

Orange Juice: Fears that Tropical Storm Ernesto might strike parts of the Florida citrus growing region sent O.J. futures higher. September Orange Juice closed at 184.55, up 1.30.

Coffee: Welcomed precipitation fell in some of the dryer regions of Brazil over the weekend, causing Coffee bulls to liquidate long positions. September Coffee closed at 103.20, down 3.00.

Crude Oil: Good news for O.J. bulls was not so welcomed by those holding long positions in Crude Oil, as Ernesto's track away from the energy production areas of the Gulf, caused a sharp sell-off in the energy complex. October Crude Oil dropped 1.90 to close at 70.61.

Monday, August 28, 2006

Orange Juice Traders Eye Ernesto!

Orange Juice traders eye Ernesto! Orange Juice futures remain near contract highs, with two consecutive below average Florida Orange crops giving traders a good reason to be bullish. Now as analysts begin their estimates for the 2006-07 crop comes the first potential storm threat of the season-- Ernesto! Currently a tropical storm, Ernesto is expected to regain hurricane status as it approaches Cuba and the Gulf of Mexico. According to meteorologists, if Ernesto stays on its current track, Florida could be its next target. Early reports from the citrus groves show lighter than average fruit count on the trees, which is leading many traders to believe that this year's crop will not show any improvement from last year. Read More....

The Dollar Was A Little Soft Overnight

The Dollar was a little soft overnight, as we head into a new week in the U.S. Although the summer lull may continue for a few more sessions, the coming week may be the most important before the Fed's next meeting on September 20th . In terms of releases, the calendar has three major releases: 2nd Quarter GDP, which is expected near 3% annually; chain-weighted inflation for Q2, which is expected at 3.3%; and most importantly, non-farm payrolls on Friday, which is expected to show an increase of 120k new jobs. Of particular importance for the Fed will be the chain-weighted inflation measure, often cited as their preferred measure, and the always-instructive non-farm payroll figure. Read More....

Markets To Watch Today

Crude Oil: With the price of Crude Oil trading above $70 a barrel, as well as the U.S. wanting to lessen its dependence on foreign oil, the U.S. has sought out alternative resources for extracting Crude Oil. The process of extracting oil from shale in the mountains of Colorado was initiated back in the 1970's, but when oil prices bottomed out in the 1980's, the project was abandoned. The problem with this method is that it has been seen as polluting and very expensive. The front month October Crude Oil contract closed down on Friday 1.16 cents a barrel at $72.51.

Dollar: During the last weeks of summer the Dollar is expected to stay within trading ranges; however, there is U.S. data coming out this week that could provide some trading opportunities, including consumer confidence, GDP 2nd quarter report and with the non-farm payroll unemployment report on Friday, which analysts hope will be positive, but most likely will continue to be negative towards the Dollar. The September Dollar contract closed on Friday up 13 at $85.30.

Friday, August 25, 2006

Wheat Futures Lonely At The Top

Wheat futures lonely at the top: In what was a bearish day for the grain complex, Wheat futures were a pillar of strength, posting two-week highs. Concerns that major Wheat exporters France, Australia, and Argentina are facing lower than expected production this year are underpinning prices. December Wheat's ability to move above the recent highs at $4.01 1/2 spurred further buying, as momentum traders competed with buy-stops to find willing sellers at higher prices. December Wheat traded as high as $4.08 before commercial sellers were found and spill-over selling from weaker Corn and Soybean prices capped further gains. Read More....

FX Closing Comments

The Dollar managed a few minor gains today to close-out another week of FX trading. Most gains came against the Yen and Aussie Dollar, with the other major holding their own. The September Dollar Index was up 13 ticks on the day. Looking ahead, next week has three major releases: 2nd Quarter GDP, which is expected near 3% annually; chain-weighted inflation for Q2, which is expected at 3.3%; and most importantly, non-farm payrolls on Friday, which is expected to show an increase of 125k new jobs. In terms of handicapping the Fed's next move, this is arguably the most important week ahead of their September meeting on the 20th.

Opportunity and Risk: An Education Guide to Trading Futures and Options on Futures

Take a look at the recently released 47-page investor education guide brought to you by the National Futures Association (NFA). Read More....

FX Pairs Were Tame Yesterday

FX pairs were tame yesterday, though the nod went to the U.S. Dollar. The durable goods report was generally well received by the stock market, as the non-defense portion was healthy at 1.5%. The currencies were, however, largely unaffected and pairs kept to their recent ranges. Earlier this morning in Europe, Q2 GDP growth in the UK was reported a notch higher than expected (.8% monthly gain, 2.6% y/y). This more robust growth is in keeping with Exchequer Chancellor Gordon Brown's optimistic view of the UK's fiscal health, which bodes well for his political aspirations. Read More....

Volatility Ahead For Natural Gas Futures

Volatility ahead for Natural Gas futures: Most traders view the last few weeks of August as a time to take a break from the markets. Volume usually is low, with traders attention being focused on getting the kids ready for the start of school or who to draft in their fantasy football league. However, Natural Gas traders are clearly focused on the markets and the latest weather forecast, as the most active part of the Atlantic hurricane season approaches. Natural Gas prices have, once again, moved above the $7.000 per MMBtu level, as traders are tracking the development of a strong tropical wave near the Windward Islands. Read More....

Markets To Watch Today

Crude Oil: Recent storm activity in the Caribbean raises a possibility of a hurricane passing through the Gulf of Mexico. This has caused some concern among traders and pushed prices up in Crude Oil yesterday. The October Crude Oil contract closed up 60 cents at $72.36 a barrel.

Wheat: Dryness in the wheat growing areas of Australia and Argentina and also concerns of an overall lower world production estimate caused Chicago Wheat prices to fall yesterday. The front month September Wheat contract closed up 9.5 cents at $3.7550 a bushel.

Dollar: Even with weaker than expected U.S. durable goods orders and housing data, the Dollar rallied yesterday. The durable goods numbers were brought down by a drawback in demand for aircraft equipment rather than the typical drop in demand for all categories. This was not enough to stop the Dollar's recovery from losses earlier this month. The September Dollar contract closed up 20 at 85.17.

Thursday, August 24, 2006

FX Closing Comments

FX pair were tame today, though the nod went to the Dollar. The durable goods report was generally well received by the stock market, as non-defense portion was healthy at 1.5%. All in all, markets are cautious and range bound are likely to remain so for the next few sessions. The key figure for next week will be the PCE deflator, the Fed's preferred inflation measure, and presently most analysts expect that the FOMC will leave rates alone next month. Signs continue to point to a 2nd-half slowdown and today's sizeable dip in new homes sales (-4.2% through July) fits into this pattern.

FX Pairs Were Largely Unchanged Yesterday

FX pairs were largely unchanged yesterday, though equities sold-off in the face of worse-than-expected existing home sales. In terms of this morning's data, it is has started rather negative, with durable goods down 2.4% in July and new homes sales expected to show continued softness. The ex-transportation figure for durable goods was up (+.5%), less than expected, though the non-defense number was a healthy +1.5%. Read More....

Gasoline Price Slump?

Gasoline price slump? Energy bears are bringing their SUV's out of the garage, as Gasoline prices have hit their lowest levels since March. Yesterday's surprise Gasoline storage build of 400,000 barrels last week shook out stubborn bulls and cast a negative tone throughout the energy complex. Going into the end of the peak US driving season, traders are shifting their attention to supplies of Heating Oil and Natural Gas, with the start of the winter heating season just 3 months away. Concerns that the US economy is slowing also weighted on the energy markets, with yesterday's weak existing home sales figures adding further evidence that consumer spending may decline, lowering energy usage in the process. Read More....

Markets To Watch Today

Crude Oil: Energy futures posted sharp losses yesterday, as a surprising storage build in U.S. Gasoline supplies, overshadowed concerns of a possible nuclear standoff between Iran and the UN. October Crude Oil fell $1.34 to close at $71.76, and September Unleaded Gasoline plunged nearly 8 cents to close at $1.8594.

Corn: Reports of "disappointing" Corn yields in Indiana and Illinois, along with better than anticipated export business, shot Corn prices higher. Nearby September Corn closed at $2.23 1/2, up 4 cents and new-crop December Corn closed at $2.40, up 4 cents.

Sugar: Solid cash market business by Middle Eastern and North African buyers ahead of the month-long Ramadan observance, coupled with continuing dry weather in the heart of the cane growing regions of Brazil, had Sugar traders in a buying mood. October Sugar posted gains of 0.35 cents to close at 12.41 cents yesterday.

Wednesday, August 23, 2006

FX Closing Comments

FX pairs were largely unchanged today, though equities sold-off in the face of worse than expected existing home sales. Many stock market bulls are edgy ahead of tomorrow's new homes data, which will be released along with July's durable goods report. Tomorrow, during the European session, the Dollar stands to gain if the influential German IFO index puts in a pessimistic showing. With the surprise fall with the German ZEW index of investor sentiment earlier in the week, many are wondering if the companies themselves are equally as grim. Expectations are calling for a 105 reading.

Cotton Prices Pickin' Up!

Cotton prices pickin' up! Cotton futures are starting to look up, as speculative buying is coming into the market. December Cotton looks to be forming a near-term bottom at 5400, after 3 attempts to take out this key support level have failed. Momentum traders were early buyers yesterday, once December zoomed past the 50-day moving average. Read More....

Markets To Watch Today

Rice: An unapproved genetically modified rice was found in commercial supplies sending Rough Rice futures prices down yesterday. The typical seasonal pressure before the fall harvest, which is expected to produce better than anticipated yields, also attributed to falling prices. The September Rough Rice contract closed down 50 cents at $9.35.

Natural Gas: Recent tropical weather systems in the Gulf of Mexico and rising cash prices for gas deliveries pushed Natural Gas prices up 6% yesterday. The September Natural Gas contract settled up 38 cents, after reaching a high of $7.03, closing at $7.008 MMBtu.

Crude Oil: Analysts say Iran is not likely to restrict the export of oil, however they do believe that Tehran may play an important role in disrupting the market if the U.N. Security Council does impose sanctions. Prices were flat for most of the day, while traders waited for a response from six nations in ending Iran's efforts to build a nuclear power program. The September Crude Oil contract closed up 18 cents at $72.63 a barrel, and the October contract closed down 20 cents at $73.10 a barrel.

Dollar Rebounds Yesterday

The Dollar rebounded yesterday, largely as a result of soft eurozone data, which caused the common currency to fall under pressure. It was, most notably, the German ZEW index of investor/analyst sentiment which fell much harder than expected and set the tone for the day's price action. Read More....

Tuesday, August 22, 2006

FX Closing Comments

The Dollar rebounded today, largely as a result of Euro weakness. The Euro fell under pressure during the European session, which spilled over in the U.S. session, as a result of some soft data. Most notable, was the German ZEW index of investor/analyst sentiment, which fell much harder than expected. Tomorrow will bring the first significant piece of U.S. data. July existing home sales are expected to fall to 6.52m units. Nearly everyone is predicting continued softness, so there is an outside "upside" risk, which would benefit the Dollar. Thursday will bring durable good and new home sales.

New York Coffee Perks Up

New York Coffee perks up: Not to be out-done by its London cousin, New York Coffee futures just missed touching multi-month highs, as speculative and industry buying supported prices. Much of the recent rally in N.Y. Coffee can be tied to the spectacular bull run being experienced in the London robusta Coffee market. Read More....

U.S. Dollar Under Pressure

The Dollar was under pressure yesterday, and with little economic data on the U.S. calendar, there was little reason to stage a comeback. The big mover was the Pound, whose gains spilled over into many of the other Dollar pairs. The September Dollar index ended the day down 45 points. Read More....

Bulls get fried in Rice!

Bulls get fried in Rice! The recent price surge in Rice futures may have come to an abrupt halt, as the U.S. government reported that a small amount of genetically modified long-grain rice was found in some storage bins in Missouri and Arkansas. The variety found was produced by Bayer AG, best known for their Bayer brand aspirin, and is not approved for sale in the US. Read More....

Markets To Watch Today

Gold: Gold remained strong yesterday, even with the price of the Crude Oil rising and continuing tensions regarding Iran's uranium enrichment program. The most active December Gold contract rose $13.50, closing at $635.20 an ounce, and the front month August Gold contract rose $13.60, closing at $625.70 an ounce.

LME: The London Metal Exchange announced they will be releasing mini contracts for Copper, Aluminum, and Zinc contracts by the end of November. These contracts will be 5 metric tons, as opposed to the 25 ton lots of the larger normal sized contracts. They, too, will be cash settled and trade electronically on LME's platform called LME Select.

Crude Oil: Iran continues to defy the current deadline to suspend their uranium enrichment program, pushing Crude Oil prices upwards. Iran threatened earlier this month to use oil that they export as a weapon if they were to follow U.N. sanctions. They will be replying today on the most recent package of incentives to remove its nuclear program. The September Crude Oil contract closed up $1.31 at $72.45 a barrel.

Monday, August 21, 2006

FX Closing Comments

The Dollar was under pressure today, during a dry day for data. The big mover was the Pound, whose gains carried over into the other pairs. The September Dollar index ending the day down 45 points. Durable good and housing figures are still due later in the week, with very little expected on Tuesday. In Europe, there is the German IFO index report for August due on Wednesday, with the Zew index on tap for tomorrow and expected to fall to 12, from last month's 15.

Markets to Watch Today

Crude-Oil: Crude futures were trading up .31 cents early Monday, as traders are focusing on Iran and the strength of the cease-fire between Israel and Hizbollah. Friday, Crude Oil ended its week-long sell-off on the upside after dropping to a two-month low of $69.60 a barrel earlier in the session. Crude Oil settled up $1.08 a barrel at $71.14.

Copper: Copper futures rose on Friday after labor talks broke down at the Chilean Copper mine Escondida. The breakdown in talks led to a halt in production and a continuation of the 12-day-old strike. Copper settled up 7.70 cents at $3.4345 per pound.

Gold: Traders are looking for Gold to rise this week, putting an end to a two-week decline. Gold futures for December delivery rose $9.30, to $631.00 an ounce, in early trading on Monday. There is optimism that jewelers will be stocking-up for the holiday season, as well as inflation concerns as the U.S. economy continues to battle Oil prices. Gold fell 3.5% last week to $621.70 an ounce.

Friday, August 18, 2006

FX Closing Comments

The FX week crawled to an end today, with most pairs sticking to familiar and tight ranges. The major events for next week are the durable goods report (expected to be up .5% for July, core up 1%) and housing sales figures. Most analysts expect housing to continue its a slide, which leaves open the possibility for some upside risk. A surprise increase, especially with new home sales, would confuse many and possibly lead to some Dollar firmness. At this stage, the Fed is likely to pause a second time in September, but much data remains.

Crude Continues To Tumble:

Crude continues to tumble: Oil futures continue to show signs of a near-term top, with the lead month September contract falling all the way to $70.00 this morning. Traders continue to cut the "risk premium" out of Oil prices, now that the truce in Lebanon is holding and Iran is ready to discuss the possibility of halting its uranium enrichment program. Previous support levels on the daily chart have given way, leading to further selling due to speculative sell-stops being triggered along the way. Today's option expiration for the September contract also added to today's weakness, with traders hedging short positions in 7200 and 7100 puts by selling futures. Read More....

Markets to Watch Today

Crude-Oil: Yesterday, Crude Futures extended their losses to close at their lowest level in nearly two months. The Mid-East cease-fire, along with greater-than-expected production from Prudhoe Bay, remain the main factors for the sell-off. Crude fell $1.83 at $70.06 a barrel yesterday, bringing its weekly decline to 7%.

Copper: Rumors that the 11-Day strike had ended at Chilean Copper miner Escondida led to a sharp sell-off in Copper yesterday. These rumors were later denied by union leaders, saying any settlement was still “days away”. Copper fell 11.25 cents to close at $1.3575 a pound.

Orange Juice: A lower-than-expected 2006-2007 Florida crop estimate continues to drive-up prices in Orange Juice. Prices yesterday hit 16-year highs. The September contract gained 6.25 cents to close at $1.8385 a pound.

Thursday, August 17, 2006

FX Closing Comments

The Dollar perked-up today in light of sinking crude and Gold prices. Although the day's data was on the soft side, Conference Board Leading indicators down .1%, the Dollar managed some notable gains against the other majors. The Pound was the big loser on the day, as retail sales figures were especially soft for July. The Aussie Dollar also fell in response to the big slide in Gold. Only one other piece of U.S. data is on the calendar for this week, with the preliminary Michigan sentiment survey expected at 86. A fairly normal economic calendar is in store for next week.

Weekly GBP/USD

As we head into a new trading day in the U.S., currencies appear to be sticking to their recent ranges. The summer lull combined with some very sideways trading patterns has been frustrating for position traders. More encouraging, though, is the prospect of much new data before the next Fed meeting in September. The emphasis remains on interest rates and since the much-anticipated "pause" the data has, on the whole, argued for a continuation of the pause. As a result of slowing growth and softer inflation readings, Dollar sentiment has become a shade more negative, with many traders worried that an impending loss of rate support could see a push past 1.30 in the EUR/USD. Read More....

Hogs Fly To New Highs

Hogs fly to new highs: Lead month October Lean Hogs posted a new contact high of 64.95 yesterday, as supportive cash prices, fund buying, and bull spreading led to the sharp rally. Hog futures remain well below the CME 2-day lean hog index of $72.16 which may have contributed to the recent price gains. Cash market sources report brisk activity, as retailers are expected to feature pork specials for the up-coming Labor Day holiday in the US. Commodity funds are net-long Hog futures and have been adding to their positions as prices move higher. Bull spreading was active, with October/December, and October/February spreads well bid. Some traders speculate that there might be many resting buy stops above 65.00 in the October contract, which if hit could project prices to $67.00. If that were to occur, look for bulls to go "hog wild" as they book profits. Read More....

Markets to Watch Today

Crude-Oil: Yesterday, a combination of falling gasoline prices and technical sellers led Crude to it’s lowest level since June. The Mid-East cease-fire, along with greater-than-expected production from Prudhoe Bay also factored into the sell-off. Crude has fallen 5.8% in the past week, with 1.6% of that occurring yesterday. Crude closed down $1.16 at $71.89 a barrel.

Natural Gas: Falling U.S. electricity demand along with an absence of weather related news led to a sell-off in Natural Gas yesterday. The September contract closed down 9.5 cents at $6.766.

Orange Juice: A lower-than-expected 2006-2007 Florida crop estimate led to a sharp rise in Orange Juice futures. The September contract gained 5.10 cents to close at $1.7760.

Wednesday, August 16, 2006

FX Closing Comments

Today's soft consumer price data put the Dollar under pressure again, as the likelihood of additional rate support has fallen further. The Dollar index was down 28 ticks with the losses in the spot market fairly evenly disbursed among the other majors. Tomorrow in the UK, their influential retails sales figures will be released, which may have an effect on Sterling pairs, should the monthly figure be significantly off from the .3%. There are also a few pieces of secondary data due in the U.S. It may be a slower day in FX, as we continue to see a lot of range trading during this traditional holiday season.

Weekly EUR/USD

Yesterday's wholesale inflation figures put the Dollar under pressure on Tuesday, despite strong capital inflows in June ($75.1b). On logic seems to be that traders are most keenly focused on the Fed, possibly to the exception of all else, and soft inflation numbers imply a continuation of the "pause", and in time, a lowering of rates. Although the TIC data is usually a significant release, the adverse reaction to a big number tells us more about current sentiment than anything else. A general rule of trading is that when good news brings a bad result, matters are particularly worrisome. It can also be argued that in the middle of August, capital inflows from June are yesterday's news. Furthermore, as the Fed is the current focus, Wednesday's more significant core CPI stole the market's attention. Thus, the Dollar fell.
Read More....

Gasoline Under $2!

Gasoline under $2! You can tell the end of the peak summer driving season is nearly upon us now that Unleaded Gasoline futures have dropped the "2" as the first digit in its price. It appears that energy bears have gained the upper hand recently, with last Thursday's sharp sell-off causing large amounts of speculative sell-stops to be hit. The cease fire between Israel and Hezbollah guerrillas has taken some of the "risk premium" out of Gasoline prices, along with a slow start to the Atlantic hurricane season. Commodity funds continue to hold long positions in all the energy markets, and further price weakness should cause these large players to start liquidating their long positions. Read More....

Markets to Watch Today

Crude Oil: U.S. data is expected to show that current crude oil stockpiles have decreased since production at Prudhoe Bay was partially shut-down. This expectation was the cause of falling prices in Crude Oil yesterday. The September contract closed down 48 cents, at $73.05 a barrel.

Wheat: Traders with the thought of lower global Wheat prices bought contracts yesterday, pushing the price of the Chicago Wheat Futures contract up. Traders that recently took a hit found that this was the time to get back in the market. The September Wheat contract closed up 2.75 cents at $3.7675

Gold: U.S. inflation data is reportedly pressuring Gold futures, as it fell to its lowest price in 3 weeks. Gold prices dropped after news that wholesale core inflation fell in July unexpectedly, and that overall wholesale prices came in below expectations which gives investors the thought that inflation pressures are easing up. The December Gold contract closed down $6.40 at $632.90.

Tuesday, August 15, 2006

Sugar Slides Further

Sugar slides further: It was another rough day for Sugar bulls, with October Sugar falling 6.5%, as funds continue to liquidate their losing long positions. The fundamentals in Sugar have turned bearish, as world Sugar supplies are expected to return to a surplus of over 3 million tons in the 2006-07 marketing year. Cash market traders report that little physical activity has taken place recently, which removed trade buyers from the market. The recent sell-off in energy futures has spilled over to the Sugar ring, with Ethanol prices starting to fall from all-time highs. Commodity funds have cut their net long positions from earlier this year nearly in half . Read More....

AUD/USD: Two-Week Range

From this morning's vantage point, it seems that Fed predictions are proving true. U.S. growth and, in turn, inflation pressures seem to be decreasing. Yesterday we learned that eurozone growth had surpassed that of the U.S. for the first time in over 6 years, which strengthens the view that the ECB will continue to hike rates in the coming months. In the medium term, however, the picture becomes cloudier. Read More....

Markets To Watch Today

Sugar: Recent Global Sugar deficits will soon be turned into surpluses, and even more production is expected worldwide. This change in Sugar caused prices to drop yesterday to 8 month lows, falling 6.5%. The October Sugar #11 futures contract dropped .86 cents, closing at 12.50 cents a pound.

Natural Gas: Prices in Natural Gas contracts fell to lows that have not been seen since before the recent heat waves across the country. The September Natural Gas contracts dropped 35 cents, settling at $6.913 MMBTu's.

Crude Oil: Two recent developments, the cease fire in the Mideast and word from BP PLC that operation in Prudhoe Bay will continue at least by half, have started sending Crude Oil prices below the $73 a barrel price. Crude Oil prices fell as much as $1 a barrel, to $72.60 in yesterday's trading. The September Crude Oil contract fell 82 cents, closing at $73.53 a barrel.

Monday, August 14, 2006

FX Closing Comments

The Dollar up just slightly today, in a day that had most FX pairs sticking to tight ranges. The key theme for the week will be inflation data and this morning we learned that both Germany and the eurozone generally were growing faster than expected at 2.4% annually. Tomorrow will see producer price data for the US., which is expected at .5%. The more important core CPI figure is due on Wednesday. UK consumer prices are also due tomorrow.

The Dollar Was Firm Overnight

The Dollar was firm overnight, and now we head into another week that looks to be dominated by the current state of inflation. Key inflation data is due in the U.S., euro-zone, and UK this week and currency traders will be paying close attention. Since inflation is the key concern for central banks, and central banks set interest rates, and interest rates attract yield-hungry investors, these numbers are, in a sense, the first link in the chain. Read More....

Can The Sell-Off "Corntinue"!

Can the sell-off "corntinue"! The USDA gave Corn bears a nice gift going into the weekend, with a much larger than expected estimate for this season's US Corn crop. The government estimate, released on Friday, called for a US Corn crop of 10.976 billion bushels. This was over 200 million bushels higher than the average analyst's estimate, and the third largest US crop ever. The average yield also increased to 152.2 bushels an acre, 3 bushels better that last month's figures. The USDA credited the increase production estimates to better than expected crop conditions in Illinois, Indiana, and Ohio, which offset lackluster production, due to dry weather west of the Mississippi River. Read More....

Markets To Watch Today

Crude Oil: Concerns over supply shortages were eased by news late Friday from BP PLC that they would maintain production in the western part of Prudhoe Bay, which is the largest producing oil field in the U.S. The September Crude Oil contract closed down 1.11 at $74.35 a barrel, and the October Crude Oil contract also closed down 1.16 at $75.99 a barrel.

Dollar: The Dollar is poised to have a flat week, although there may be opportunities for volatility, specifically when there is new data released related to inflation. New data regarding inflation will push investors to adjust their expectations for a rate increase in September. The September Dollar contract closed up 44 at 85.39.

Friday, August 11, 2006

FX Closing Comments

The Dollar had a big day today, making broad gains against the other majors. The September Dollar index was up 44 ticks on the day. The impetus came from the unexpected surge in retail sales, which implied that underlying growth may not be slowing as quickly as previously thought. Looking ahead to next week, the key TIC (capital inflow) data will be released on Tuesday from the Treasury department. It is hoped that the figure will be higher than the corresponding trade deficit of $64.8b. Key inflation is due next week in both the UK and the U.S. Keep in mind that Monday is the Obon bank holiday in Japan.

Markets To Watch Today

Natural Gas: A larger than expected withdrawal of gas from storage, as reported by the U.S. government report, last slowed Natural Gas prices yesterday. The September Natural Gas contract closed down 12.2 cents at $7.529 MMBTu's.

Gold: A big sell off hit Gold futures yesterday, in spite of the terrorism threat in the United Kingdom. The December Gold futures contract fell $16, closing at $646 an ounce and the August Gold futures contract fell $15.60, closing at $634.90 an ounce.

Crude Oil: Crude Oil futures dropped yesterday as traders are betting that the recent terror attempt will dampen air travel resulting in a lower demand for jet fuel. Yesterday saw the largest decline in the front month contract in the last three months. Analysts say some profit taking was to blame. The September Crude Oil contact dropped $2.35, closing at $74 a barrel.

Thursday, August 10, 2006

FX Closing Comments

In the currency markets today, the Dollar benefited from some safe-haven buying, while the Pound sold-off in response to the arrests in the UK of suspected terrorists, believed to be plotting to down as many as 10 U.S. bound airplanes. The Pound has already pulled back from today's lows as matters continue to unfold. Looking ahead till tomorrow, we have the Bank of Japan ending their two-day policy meeting. Although no rate move is expected, the follow-up commentary is expected to be hawkish. To end the week in the U.S., we have retail sales figures for July, which are expected to show a 1% rise.

Focus Is On U.S. Deficit

With the exception of the Japanese Yen, FX markets were tame overnight. The focus this morning, aside from developments in the UK terrorism plot, is on the U.S. trade deficit. For FX traders, "global imbalances" are potentially the biggest unknown and arguably the greatest risk to the Dollar's long-term strength. Read More....

Bears Continue To Feast on Lumber Bulls

Bears continue to feast on Lumber bulls: Luxury home builder Toll Brothers company chairman Robert Toll said the following about the current housing market slowdown: "This is the first downturn in the forty years since we entered the business that was not precipitated by high interest rates, a weak economy, job losses, or other macroeconomic factors." Read More....

Markets To Watch Today

Crude Oil: An early rally in Crude Oil yesterday that was brought about by bullish inventory data and continuing concerns over interruptions in supply due to the closure of the Prudhoe Bay Oil field in Alaska slowed towards the end of the trading session. The September Crude Oil contract rose 4 cents, closing at $76.35 a barrel, and the September Unleaded Gasoline contract closed down 5.41 cents at $2.1722 a gallon. The September Heating Oil contract also dropped yesterday, closing at $2.1063 a gallon.

Natural Gas: Traders are expecting today's weekly inventory report to once again show an unprecedented storage withdrawal. The September Natural Gas contract closed up 49.3 cents or 6.9% at $7.651 MMBtu's.

Copper: The labor strike at Escondida in Chile has reached its third day. As a result, Copper futures hit four week highs, and output at the mine has dropped by 60%. The laborers are demanding a minimum 13% wage increase, a hardship zone wage increase, and a $29,300 net bonus. The September Copper contract closed up 10.8 cents at $3.71 a pound.

Wednesday, August 09, 2006

FX Closing Comments

FX markets were restrained today, largely keeping to established ranges. The key upcoming events include the Bank of Japan's policy meeting, scheduled for the next two days, and the release of Friday's U.S. trade deficit figure. The BoJ meeting is unlikely to result in any rate hikes, though the commentary is likely to be "hawkish". In terms of the U.S. trade number, look for a figure close to $64b for June. Retail sales figures are also expected on Friday, and expected to show a 1% rise (.8% core).

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Though we expect you'll find our website to be refreshingly intuitive and user-friendly, you might still like to join us for a live, online system walk-through. This is a new service that we've decided to offer, and we think it'll be a great way for both new and existing clients to learn about everything our browser-based trading platform has to offer.These training sessions will be held twice weekly and take place online, in a virtual classroom. If you're interested in participating, you'll simply log into the training site at one of the designated times, and you can watch in real-time as a member of the XPRESSTRADE customer service team moves through the website, pointing out all the tools at your disposal. You can even listen to the instructor over your computer speakers.At the end of each online group training session, you’ll have the opportunity to post questions for the instructor. Not only will you receive direct answers to your questions, but you might very well find that answers to questions from your fellow traders will be helpful to you, too. We encourage you to give this new complimentary service a try!Every Wednesday at 12:00PM CST and Every Thursday at 1:00PM CST

Join Us Today at 12:00 PM Noon For A Platform Walkthrough Our Site!

Though we expect you'll find our website to be refreshingly intuitive and user-friendly, you might still like to join us for a live, online system walk-through. This is a new service that we've decided to offer, and we think it'll be a great way for both new and existing clients to learn about everything our browser-based trading platform has to offer.These training sessions will be held twice weekly and take place online, in a virtual classroom. If you're interested in participating, you'll simply log into the training site at one of the designated times, and you can watch in real-time as a member of the XPRESSTRADE customer service team moves through the website, pointing out all the tools at your disposal. You can even listen to the instructor over your computer speakers.At the end of each online group training session, you’ll have the opportunity to post questions for the instructor. Not only will you receive direct answers to your questions, but you might very well find that answers to questions from your fellow traders will be helpful to you, too. We encourage you to give this new complimentary service a try!Every Wednesday at 12:00PM CST and Every Thursday at 1:00PM CST

EUR/GBP: Possible Reversal

The past day has revealed the current thinking of two of the world's major central banks, the Bank of England and the U.S. Fed. Yesterday's Fed decision was very much in keeping with market expectations and left currencies, after a lot of volatility, largely unchanged. The follow-up commentary was balanced, data-dependent, and slightly dovish. Essentially, the FOMC feels that past rate moves and slowing growth will contain inflation, though they are ready to act in coming months, if necessary. Key phrases from the statement included: Read More....

Corn Continues Lower Ahead Of USDA Report

Corn continues lower ahead of USDA report: After all the ethanol hype, Corn futures have come back down to earth, with new-crop December Corn trading near recent lows. Ideal weather conditions in the Midwest this week have large speculators re-thinking their long position, and fund liquidation has been a factor in the recent sell-off. It is estimated that commodity funds might be net-long over 200,000 contracts, and if prices continue to fall, much more of this position could be liquidated, depressing prices further. Trading is expected to be choppy the next few days, as traders fine-tune their positions ahead of Friday's USDA's crop production and supply/demand reports. Read More....

Markets To Watch Today

Soybeans: The weather this week has agreed with crops in the Midwest and is proving to be beneficial, causing prices to drop in Soybean futures. The November Soybean contract, which represents the fall harvest, hit is lowest price since March of 2005, dropping 5.75 cents, closing at $5.7625 a bushel. Front month August Soybeans also dropped 5.75 cents, closing at $5.575.

Crude Oil: Crude Oil futures fell in yesterday's trading on news that the BP, who operates the Prudhoe Bay Pipeline, may be able to make parallel repairs on the damaged part of the pipeline without taking down the entire operating system. Analysts say that BP is more optimistic than before, although traders are still wary of the long-term outlook. The September Crude Oil contract reached as high as $77.45 before falling 67 cents, closing at $76.31 a barrel.

Dollar: The Dollar was volatile yesterday and has fought back after the Fed Announcement that interest rates will remain unchanged. This is not uncommon, as traders typically adjust their positions once the announcement has been made. The September Dollar contract dropped 5 points closing at 84.48.

Tuesday, August 08, 2006

The Sugar Bull Market Turns Sour

The Sugar bull market turns sour: Sugar futures sank to 2006 lows this morning, as commodity fund liquidation continued. The most-active October contract broke though key support at 14.00, triggering sell-stops along the way. Sugar futures were the darling bull market in 2005, as tight world supplies and increased demand for cane-based ethanol had commodity bulls in a frenzy. This year gravity has taken its toll on Sugar prices, with increased production coming from India, supplies coming to market from the Brazilian harvest, and bearish chart patterns causing speculators to exit long positions. Read More....

GBP/USD

Overnight, FX pairs were very quiet ahead of today's key Fed meeting. Early in the U.S. session, the futures market continued to price in only low (16%) likelihood of a .25% rate hike. Whether today will bring one more hike or a pause, it remains the case that the Dollar will likely be losing rate support. Contributing to poor Dollar sentiment is the overall feeling that growth, especially in the jobs market, is slowing. If true, it may not be long before we are discussing rate decreases by the Fed. Read More....

Should We Raise Or Should We Pause?

Should we raise or should we pause? That is the tune going through Federal Reserve Governors heads this morning, as the August FOMC meeting is scheduled to start at 9 am Chicago time. Traders have already voted with their trading accounts in the Fed Funds Futures market. Currently, the August contract is giving only a 16% change that the Fed will raise short-term rates 25 basis points today. The final piece data available to help their decision was released this morning, with the release of U.S. productivity growth figures for the 2nd quarter. Read More....

Markets To Watch Today

Soybeans: Multi-month lows were reached yesterday in Soybean futures contracts, as news on improved weather conditions in the Midwest developed. Most active November Soybean contracts, which is the fall harvest, dropped 15 cents, closing at $5.82 per bushel. The front month August Soybean contracts dropped 14.25 cents, closing at $5.6325

Copper: Even with the start of a strike at Escondida in Chile, which is the largest Copper producing mine in the world, Copper prices dropped yesterday. Analysts say that the strike is already reflected in the price of Copper and at this point everyone is waiting to see how long the strike lasts. The September Copper contract closed down 2.2 cents at $3.6105 a pound.

Crude Oil: Closure of Prudhoe Bay's pipeline, which represents about 8% of the total U.S. output or 400,000 barrels a day of production, caused Crude Oil prices to achieve their biggest one day percentage gain in more than four months. Crude Oil prices reached as high as $77.30 before settling at $76.98, up $2.22 or 3%. Crude Oil prices have risen 26% this year alone.

Monday, August 07, 2006

FX Comments

Currency markets were, for the most part, restrained today, as traders held tight ahead of tomorrow's key Fed meeting. The Canadian Dollar, however, jumped early in the U.S. session on word of troubles with BP's Alaskan oil operation. The Futures market remains confident that a pause is in store, currently pricing only a 16% chance of a .25% rise. Expect significant volatility if another rise is announced at 1:15 Central time. Whether the last rise was last month, or in store for tomorrow, it is easily to argue that the Dollar may have a difficult time ahead. With many other banks, notably the Bank of England, still in hiking mode, the medium-term rate outlook is increasingly "Dollar negative." Unlike most Fed meetings, the actual rate announcement will be just as significant as the follow-up commentary.

USD/CAD: Event-Driven Start To The Week

Heading into the new week, all eyes will be on tomorrow's Fed meeting. Consensus opinion is confidently predicting a "pause", yet opinion is not unanimous. The basic argument for a pause is that housing is slowing, growth has fallen off in Q2, job growth is soft, and all of the above was more or less predicted by Ben Bernanke in his Congressional testimony. His argument at the time was that slowing growth and the effects of past rate hikes had set the course for restrained inflation heading into the 2 nd half. On the other hand, most measures of inflation are above what most central banks would consider their "comfort level", wage inflation, in particular, is concerning, and there remains speculation that the new Chairman will not want to risk his credibility so early in his tenure. All will be revealed tomorrow. Read More....

Just When You Thought It Couldn't Get Worse!

Just when you thought it couldn't get worse! Oil futures are set for a volatile week, after Oil giant BP announced that it shut down its Prudhoe Bay oil field in Alaska over the weekend, due to corrosion found in the pipeline and several small spills along its route. Nearly 8% of U.S. Oil production comes from Prudhoe Bay, totaling 400,000 barrels a day. A spokesperson for BP could not predict how long production will be off-line. The timing of the outage could not be worse, as Middle East tensions continue to rise, and production in Nigeria and Iraq is restrained. Read More....

Markets To Watch Today

Ethanol: With the current boom in Ethanol Futures contracts, so is the boom in building dozens of multimillion-dollar ethanol stills also called "biorefineries". This current "boom" in construction will increase the domestic production of alternative fuels, which has been estimated at 4.8 billion gallons per year. Although Ethanol production has increased, the price of Corn futures hasn't; in fact a Corn contract is worth about the same as it was two years ago. The reason, analysts say, is because Ethanol is causing a divergence in prices, as Ethanol plants draw away from Corn delivery points designated by the Chicago Board of Trade, which is causing greater basis volatility. September Corn contracts closed flat on Friday at $2.45 per bushel. The August Ethanol contract closed up 10 cents, at $2.56 per gallon.

Dollar: A weaker than expected employment report for July pushed the Dollar down Friday. The Dollar could be set to hit some ranges this week, based on the Federal Reserve's expectation of a halt in its rate tightening campaign, which has been going on for the last two years. Investors say there is only a 15% chance the Fed will increase rates. The September Dollar futures contract closed down 42, at 84.38.

Friday, August 04, 2006

FX Closing Comments

The FX Trading platform seemed to handle the NFP without much trouble. There were only a few isolated complaints about the dealing desk. FX Trek charts were back on-line.

The Dollar faired poorly today, as today's slack payroll number decreased the odds of a Fed rise. The Dollar Index was down 42 ticks on the day. The losses were spread widely, with only the Canadian Dollar losing ground. The real FX story this week was the British Pound, which passed the key 1.90 level against the Dollar. Some analysts are now predicting a 2:1 ratio by the end of the year.

Non-farm payrolls disappoint! Fed finished?

Non-farm payrolls disappoint! Fed finished? Once again, economists and analysts were overly optimistic, predicting July's non-farm payrolls figures. The Labor Department announced that 113,000 new jobs were created in July, well below the average expectation of between 150,000 and 160,000 jobs. Read More....

Dollar Remains Soft After Non Farm Payroll Announcement

The big non-farm payrolls figure was reported this morning, and showed 113,000 new jobs created for the month of July. The unemployment rate moved higher to 4.8%, with hourly earnings up .04%. Despite the earnings growth, the market sees today's data as a soft, or "dovish" number, that decreases the likelihood of a Fed move next week. Read More....

Markets To Watch Today

Natural Gas: U.S. Data showed a slight rise in volume in storage, which was higher than expected last week. This along with the possibility of Tropical Storm Chris being downgraded, pushed prices down in Natural Gas yesterday. The September Natural Gas contract closed down 6.5%, or 50.7 cents at $7.292 MMBTu's.

Copper: A surprise rate increase by the Bank of England has spurred fears of interest rate hikes here in the U.S. This, along with optimism of a possible agreement being reached between the union and management at Escondida in Chile, put pressure on Copper prices yesterday, pushing them lower. The September Copper contract dropped 10.15 cents, closing at $3.4895 per pound.

Thursday, August 03, 2006

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World's Bank Busy Overnight Fighting Inflation

Overnight the world's central banks were busy fighting inflation and raising rates, as 3 major banks made decisions to go higher. One was expected (ECB), one was questionable (Reserve Bank of Australia), and one was a surprise (Bank of England). Read More....

Calm Before the Interest Rate Storm

Calm before the interest rate storm: For U.S. interest rate traders, the next few day should set the tone for the direction of the market, as two key events will take place. First there is Friday's always anticipated non-farm payrolls report for July. Current estimates are for a gain of 155,000 jobs. Read More....

Markets To Watch Today

Corn: The extreme heat and dryness recently in the Midwest is causing traders to be concerned about the possibility of lower corn yields, pushing prices upward. The September Corn contract closed up 6.75 cents at $2.4725 a bushel. The December Corn contract which represents the newest crop in Corn, also gained on the day, up 6.50 cents, closing at $2.6425 a bushel.

Crude Oil: As Tropical Storm Chris threatened to become a hurricane yesterday, which has the potential to hit the bulk of U.S. energy infrastructure in the Gulf of Mexico, prices in Crude Oil rose, reaching $76 a barrel. The September Crude Oil contract closed up 90 cents, at %75.81 a barrel.

Natural Gas: Natural Gas contracts gained back some of the losses they incurred earlier in the week, as the heat continued to swelter on the east coast. Analysts say that the heat forecast and storm track are what have been driving the markets. The September Natural Gas contact closed up 22.5 cents, at $7.799 MMBTu's.

Wednesday, August 02, 2006

FX Closing Comments

Wednesday was a very dull day in FX trading, with all the major pairs holding steady ahead of ECB and Bank of England rate announcements, which are due tomorrow. The ECB is expected to move a quarter-point higher, while the Bank of England Monetary Policy Committee is expected to hold steady at 4.5%. Any change from this expectation (i.e. a surprise BoE move or a 50bp ECB move) would surely shake-up the market.

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XPRESSTRADE Market Analyst, Mike Zarembski talks about support and resistence points in Gold and Crude Oil.

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Though we expect you'll find our website to be refreshingly intuitive and user-friendly, you might still like to join us for a live, online system walk-through. This is a new service that we've decided to offer, and we think it'll be a great way for both new and existing clients to learn about everything our browser-based trading platform has to offer.These training sessions will be held twice weekly and take place online, in a virtual classroom. If you're interested in participating, you'll simply log into the training site at one of the designated times, and you can watch in real-time as a member of the XPRESSTRADE customer service team moves through the website, pointing out all the tools at your disposal. You can even listen to the instructor over your computer speakers.At the end of each online group training session, you’ll have the opportunity to post questions for the instructor. Not only will you receive direct answers to your questions, but you might very well find that answers to questions from your fellow traders will be helpful to you, too. We encourage you to give this new complimentary service a try!Every Wednesday at 12:00PM CST and Every Thursday at 1:00PM CST

Bears Starting To Bale Out of Cotton

Bears starting to bale out of Cotton: Cotton futures prices have been surging of late, as speculators have exhausted their attempts to take the market lower. December Cotton hit a 5-week high of 5685 yesterday, with short-covering buy stops being triggered once key resistance at 5635 was breached. Read More....

Is the AUD/JPY Turning Bullish?

The Dollar was soft yesterday, despite a strong ISM manufacturing index, which rose to 54.7 for July. Construction spending was also up 0.3% in June. One would have thought that such news would have increased the likelihood of an August rate hike, which it did, but even still, the Dollar slumped. Read More....

Markets To Watch Today

Unleaded Gasoline: With the formation of Tropical Storm Chris, prices rose for Unleaded Gasoline contracts yesterday. TS Chris is causing some concerns to refining facilities in the Carribean. The September Unleaded Gasoline contract closed up 6.44 cents, at $2.2762 a gallon.

Orange Juice: Orange Juice reached contract highs yesterday, as traders added a premium to FCOJ brought on by Tropical Storm Chris. The September Frozen Concentrated Orange Juice contact rose 6.25 cents, closing at $1.7550 a pound.

Natural Gas: Profit taking sparked a drop in Natural Gas prices yesterday, as traders took their profits and ran. Traders now are focused on Tropical Storm Chris and how this could threaten domestic gas-oil production. The September Natural Gas contract dropped 63.7 cents, closing at $7.574 MMBTu's.

Tuesday, August 01, 2006

FX Closing Comments

The Dollar is soft today, even as the ISM manufacturing index rose to 54.7, above expectations in July. Construction spending was also up 0.3% in June to record level. One would have thought that such news would have increased the likelihood of an August rate hike, which it did, but even still, the Dollar slumped. The biggest gainer was the British Pound were the influential Nationwide housing survey showed higher-than-expected gains in home prices. This development increased the odds of BoE upward move, possibly as early as September.
Service sector PMI figures are due in Europe tomorrow, along with retail sales data.

USD/JPY And Bollinger Bands

FX markets were, for the most part, quiet yesterday, as traders looked forward to upcoming Central Bank developments and Friday's key payroll report. Chances are very high that the ECB will be moving higher on Thursday, owing to a sustained rise in inflationary pressures. In fact, newly released inflation figures showed eurozone inflation at 2.5%, easily above the pivotal 2% comfort level. Many now feel that the ECB will become increasingly "vigilant" in the 2 nd half, with another 75bps predicted by the end of the year. Read More....

Natural Gas Is HOT HOT HOT!

Natural Gas is HOT HOT HOT! That's what bullish traders were saying yesterday, after the lead month September contract surged over $1, as temperatures climbed into the triple digits over many parts of the US. Demand for electricity surged in the Midwest, with power companies reporting a record amount of usage due to high air conditioning demand. Energy companies have to fire up gas burning generators to meet peak energy demand. Last week's surprising draw of Natural Gas from storage started a short-covering rally last week that caught many traders off guard. Read More....

Markets To Watch Today

Copper: News that workers at Chile's Escondida Copper Mine may possibly strike pushed Copper contracts higher yesterday. The September Copper contract rose 2.10 cents, closing at $3.57 per pound.

Crude Oil: With the continued conflict in the Middle East and the continued heat wave pushing Natural Gas prices upwards, Crude Oil rose 1.6% yesterday. The September Crude Oil contract closed up $1.16, at $74.40 a barrel.

Natural Gas: The persistent heat wave moving through most of the Midwest has continued to drive up the demand for gas-fired power as the heat moves east. Peak-load electricity demand uses gas-fired units. Demand is forecast to reach as high as 119,396 megawatts in the Midwest yesterday, above its previous record of 113,054 megawatts, which was set on July 17th of this year. 1 megawatt can power about 500 households. September Natural Gas contracts closed up $1.027 at $8.211 MMBTU's.