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Wednesday, January 31, 2007

Treasuries Rise on Fed Announcement

Treasuries rise modestly on Fed announcement. Treasury futures staged a rebound this afternoon, as there were few surprises in the FOMC announcement. As expected, the Fed kept the federal funds rate steady at 5.25%. In its statement released just after the rate announcement, the Fed was more upbeat about the economy, saying it should expand "at a moderate pace" in coming quarters, in contrast with its statement after the December 12th meeting in which it put forth the assessment that US growth had "slowed" due to "substantial cooling" in housing. Read More....

FX Daily Wrap Up

After a mid-morning rally for the Euro, the US Dollar declined further when the Federal Reserve announced that interest rates would remain unchanged at 5.25 percent. For the better part of the year, interest rates have held steady, keeping the market's focus on the Federal Open Market Committee statement. Today's statement was only moderately more hawkish than the prior month. The FOMC held off on any change to see whether the surprise strength in recent data is a misleader or a false bullish indicator. The Feds stated that they needed at least two more months of solid economic data before considering the possibility of a fourth quarter rate hike. Further review of the statement showed that the Fed has acknowledged the signs of a potential bottom in the housing market, as well as firmer economic activity overall. The Fed remains concerned about inflation, given the recent upturn in oil prices and the potential for the tight labor market to boost wage pressures going forward. The US Dollar is currently selling off, which has once again pushed the EUR/USD pair over the 1.3000 mark. As we head into the Asian trading sessions, the EUR/USD is at 1.3031, and the GBP/USD is at 1.9643. David Hilgeman, XPRESSTRADE Analyst

Oil Market Heating Up?

Oil market heating up? It certainly appears to be the case, as renewed speculative buying – primarily by commodity funds – was behind Tuesday's nearly $3 gain in Crude Oil prices. Word that Saudi Arabia would reduce production by 158,000 barrels was the main catalyst for the price surge, with forecasts for below-normal temperatures in the central and eastern US and an improved economic outlook for the US also providing support. Read More....

Slow downs and pull backs for the Dollar and Yen

There was little activity for the Dollar during the European session and modest pullbacks against the Yen during the Asian session. The U.S. fourth quarter gross domestic product report was expected to be slightly higher at 3%, but came in stronger at 3.5%. Read More.....

Traders Brace for Report Heavy Day, Fed Announcement

S&P 500 – Despite higher energy prices, S&P futures rallied yesterday to end a three-day slide. There was not a lot of news in the equity market, with little reaction to the Consumer Confidence number coming in slightly better than consensus estimates. Read More.....

Tuesday, January 30, 2007

FX Daily Wrap Up

The majors are in a full lockdown awaiting Wednesday’s FOMC release and the Gross Domestic Product Report. The US Dollar was hardly changed after a report showed that the US Consumer Confidence Index rose to 110.3 in January, which was the expected outcome. The EUR/USD trading was range-bound with a high of 1.2980 to a brief low of 1.2941, a meager 40-pip range. Following suit, USD/CHF stepped down its 40-point channel with a top around 1.2545. The expected market mover today was the Conference Board’s consumer confidence report for January. Without any major releases on Wednesday, the report’s print would have triggered an immediate and widespread Dollar bid. The indicator advanced for the third consecutive month to its highest level since March of 2002. Tomorrow should set the stage for the short-term fate of the US Dollar. Be prepared to see drastic moves if reports surpass or fall short of expectations. David Hilgeman, XPRESSTRADE Analyst

OJ futures Fall as Freeze Scare Diminishes

OJ futures fall as freeze scare diminishes: Bears were in firm control of the Frozen Concentrated Orange Juice market this morning. Strong speculative selling grew as potentially freezing temperatures failed to materialize over much of the growing region and Florida citrus growers reported minimal damage. Read More....

Yen Hits Four Year Low

The Yen hit a four-year low against the US Dollar yesterday, which has raised concerns that this low price could sway the market if the trend continues. The growing use of “carry” trades, in which investors borrow in currencies with low interest rates (i.e. the Yen) and invest in those currencies with higher rates such as the Australian Dollar and the New Zealand Dollar, have many analysts believing that these trades may be part of the reason that the Japanese Yen is reaching new lows despite a stable economy and a large potential for growth. Read More.....

OJ Falls Sharply in Late Trading

Orange Juice – OJ futures came tumbling down in yesterday’s trading, with the front-month OJH07 shedding 650 points to close at 195.50, just above support of 195.45. Most of the losses came late in the day with long speculator liquidation. Read More.....

Bonds quiet ahead of FOMC meeting:

Bonds quiet ahead of FOMC meeting: Treasury Bond traders have been decidedly bearish of late, with signs of an improving US economy and continued inflation fears triggering a classic two-month long downtrend in Bond prices. Traders will get a bit of a breather as the market awaits a data-heavy week, starting today with the 2-day FOMC meeting, 4th quarter GDP figures on Wednesday, and finally January Non-farm payrolls on Friday. Read More....

Monday, January 29, 2007

FX Daily Wrap Up

This week should set a tone for the US Dollar. The main releases that bear watching include the FOMC statement, Gross Domestic Product report, the Institute of Supply Management Manufacturing survey and the Non-Farm Payrolls report. Of these four, the ISM report and non-farm payrolls will command the most attention, as they are the two most market-moving indicators for the US Dollar. While the USD is in little fear of a rate hike, this week’s news may show an overall trend for the first quarter. Looking at our neighbors, the British pound underperformed both the US Dollar and Euro after the Bank of England’s monetary policy member Blanchflower said that inflation could fall back below the Bank of England’s 2% goal by the end of the year. Blanchflower cited a general slack in the labor market, which has pushed wage growth to lower-than-expected levels. Expect to see the Majors make large moves based on the US data.
David Hilgeman XPRESSTRADE Analyst

Copper Cools Off:

Copper cools off: Copper futures fell sharply this morning, breaking below a key moving average as technical selling tied to weakness in the entire base metals complex caused today's plunge. In addition, another stock build at the London Metal Exchange also weighed on prices. Read More....

The Dollar has its chance

The Dollar had a chance to crack 122.00 against the Yen during a muted European session, but failed to make progress to sustain gains. The buck will get another chance to reach 122.50, or higher, on the back of a data heavy week and unemployment reports this week. Read More....

Expensive Corn Doesn't Trim Cattle on Feed

Live Cattle – Friday’s Cattle on Feed report failed to give Live Cattle bulls much good news. Feed numbers were 101.4% over last year at this time, even with corn at multi-year highs. More importantly for nearer-term futures – specifically February and April – was the on feed over 120 days number, which came in at 136.3% over last year. Read More....

Bitter Chocolate

Melting Chocolate: Cocoa futures continue to struggle, falling to 8-week lows this morning as speculators start to liquidate long positions on the belief that the main Cocoa crop of the Ivory Coast will be larger than expected. According to government officials, the Ivory Coast should harvest 930,000 metric tons of Cocoa in this season’s main crop. Read More....

Friday, January 26, 2007

FX Daily Wake Up

Big News, Lackluster Performance

The FOREX market would traditionally be swayed by today’s release of the New Home Sales report, but no such movement occurred. The US Dollar initially gained against the Euro and the rest of the majors after two reports from the US showed improvements from the previous period. Durable goods orders rose 3.1% in December, up from a 2.2% reading in the previous month. New home sales increased at an annual rate of 1.12 million units, beating the forecast of 1.05 million units. Next week the Chicago Purchasing Managers survey; the Fed’s rate decision; and the first reading of fourth quarter GDP might have better luck moving the market than today’s release. As we hit the close, the EUR/USD is trading at 1.2913, and the USD/JYP is currently at 121.58. XPRESSTRADE Analyst David Hilgeman

Aussie Shows Breakdown Even With Bounce in Commodities

Australian Dollar – The March Aussie has broken sharply over the last two days, shedding 188 points. Normally, a rally in commodity prices, especially metals, has acted as a catalyst for the Aussie Dollar because Australia’s economy is heavily weighted toward raw materials. Read More....

Yen in the Spotlight

The Dollar Yen pair continues to occupy the foreign exchange spotlight amid interesting developments in Japan. Inflation was seen on the decline in December, refueling fears that the 7-year drought of deflation for the country is not quite finished. Read More....

Are bears developing a sweet tooth?

Are bears developing a sweet tooth? Sugar futures have been caught in a 2-cent trading range since late September, as the market has taken a breather following the sharp run-up in the first half of 2006. Now there are signs that sugar might be ready to make its next move. Read More.....

Rally runs out of Gas!

Rally runs out of Gas! Natural Gas bears started to flex their muscles after a week long absence, as speculators bailed out of long positions after the EIA announced that last week's draw of Gas from storage was in-line with pre-report estimates. The EIA said 179bcf of Gas was taken out of storage for the week ending January 19th. Read More.....

Thursday, January 25, 2007

Sugar No So Sweet

Sugar – March Sugar futures have been treading water over the last week, as traders try to feel out the market. Fundamentally, there is little news helping the Sugar market. There has been ample supply, and value buyers are not rushing to the marketplace to help slumping prices. Read More....

Carried All Away

Traders finally receive U.S. data to digest today, with initial jobless claims expected to increase slightly around 300,000. Also on tap, existing home sales for December will show the disparity between supply and demand in the housing market. Read More.....

Copper starting to form a base

Copper starting to form a base: Copper futures have been struggling of late, failing to generate the bullish interest of its base metal cousins such as Nickel, Tin, and Zinc, which are trading at or near all-time high prices. However, there are signs that Copper might be ready to make a run. Read More....

FX Daily Wrap Up

This morning the Australian Dollar had a bit of a dip on a weaker-than-expected inflation report for the fourth quarter, with the AUD/USD pair losing 110 pips in under an hour. Consumer prices, as measured by the Australian Bureau of Statistics, dropped for the first time in almost eight years at a quarterly rate of 0.1 percent, which brought the total annual rate to down to 3.3 percent. The current target for the Reserve Bank of Australia is a figure around 3.0 percent, so this decline is in line with the larger game plan. Weaker oil prices led the decline, as gasoline costs fell 12.4 percent. The Australian Reserve has a reason for relief from inflationary pressure for the moment with current reports stating a less-than-expected 0.5 percent during the quarter, leaving the annual figure stable at 2.9 percent. Governor Steven is far less likely to tighten monetary policy in February after hiking rates three times in 2006 to bring the Australian rate to a six-year high of 6.25 percent. As we move into the Asian trading sessions, the AUD/ USD pair is trading at .7800, a sharp decline from yesterday’s high of .7935. XPRESSTRADE Analyst David Hilgeman

Buy the rumor, sell the fact:

Buy the rumor, sell the fact: Corn futures fell sharply today, with the lead-month March contract moving below the $4 level early in the session as traders booked profits after President Bush's State of the Union address. The President called for increasing US usage of renewable fuels to 35 billion gallons by 2017, up sharply from the current mandate of 7.5 billion gallons by 2012. Read More.....

Wednesday, January 24, 2007

Crude Could Get Boost from Bush, Energy Reports

Crude Oil – March Crude got a boost in late trading yesterday as Secretary of Energy Sam Bodman said the government planned to more than double the Strategic Petroleum Reserve (SPR) over the next twenty years. This may not be as bullish as it initially appears however, as the time frame is so broad and the government would probably only be buying on big dips. Read More.....

Aussie Dollar Dips

The Australian Dollar had a bit of a dip on a weaker-than-expected inflation report for the fourth quarter. Consumer prices, as measured by the Australian Bureau of Statistics, dropped for the first time in almost eight years at a quarterly rate of 0.1 percent, which brought the total annual rate down to 3.3 percent. Read More....

Crude Futures Soar!

US seeks to double Strategic Petroleum Reserve: Crude Oil futures surged nearly 5% yesterday to move over the $55 per barrel threshold after reports from the Bush administration that the US plans to double the capacity of the Strategic Petroleum Reserve (SPR) by 2027 to 1.5 billion barrels. Read More....

Tuesday, January 23, 2007

FX Daily Wrap Up

The USD took a quick gain today, only to lose steam and be beaten back to almost where it began. Economic data out of Europe was materially stronger today, as French consumer spending for the month of December was higher by 1.3 percent, bringing the annual rate to 6.8 percent. While this is the highest since September of 1998, the trend for Europe is that the French numbers traditionally bring down the currency against the majors. This recent gain was led by a 2.0 percent jump in car sales after the figure dropped 1.0 percent the month prior. Sales in the retail sector also contributed significantly, coming in at 1.2 percent for the month. Fourth quarter consumption is up for Great Britton and the Euro-zone. In addition to positive spending, Industrial New Orders beat expectations with a jump of 1.4 percent. Conventional wisdom states that positive data should lead to a gain for the Euro, but today the Dollar started off in control before losing its hold and finishing out the American session near where it started out. The EUR/USD is currently trading at 1.3025. David Hilgeman

Base Metals Are Gold

Base Metals are golden! The London Metals Exchange was rocking again today, with Tin and Nickel futures hitting new all-time highs as continued supply problems loom over the market. 3-month Tin futures made a high of $12,249 per ton on speculative buying, due in part to the continued licensing shutdown of 20 small smelters throughout world production leader Indonesia since October. Read More.....

Pound Strong Againist the Dollar

The Pound Sterling is continuing its strong move to the upside against the Dollar, peaking at 1.9918 overnight. With better than expected economic growth for the previous three quarters, the Sterling is supported by the possibility of another quarter-point hike in rates, perhaps as early as next month. Read More.....

They Call It "Yellow Metal"

Is Gold regaining its luster with investors? With most of the recent focus on the Crude Oil market and its rapid decline so far in 2007, many traders have missed out on the recent up-move in Gold futures. February Gold has quietly climbed to 3-week highs this morning, as a weaker US Dollar and a moderate rally in Oil prices have given Gold bulls renewed optimism. Read More.....

Chinese Demand and Signs of Life in Housing Lift Copper

Copper – March Copper futures are up nearly four cents in early trading as Chinese imports of copper rise. China imported 11 percent more copper than in November, marking the highest rise in imports of the base metal since October 2005. Read More......

Monday, January 22, 2007

FX Daily Wrap Up

The Greenback lost a bit a bit of steam today in otherwise light trading. Last Friday’s trading frenzy produced a roller coaster, with the Dollar ending up where it left off. Today the Euro gained about 30 pips in a slow and controlled manner. The EUR/USD pair found a modest bid in early morning trading hours for a 60-point run to 1.2920 before losing steam and retracing much of the move. Supporting the EUR/USD action, the USD/CHF made a move from its 1.2470 support, only to post a spike and high around 1.2530 before making a full reverse to retrace the move. Last but not least, a new four-year high in USDJPY was slowly forged as ever-attractive carry drew in bids to 121.80. XPRESSTRADE Analyst David Hilgeman.

Decaffeinated!

Decaffeinated! March Coffee fell to 2-month lows this morning, as speculative selling amidst slow trade buying weighed on prices. Traders noted a burst of selling tied to sell-stops once the March contract fell below 118.00. Trade buying was seen below 117.50, and put an end to the day's declines. Read More.....

Fed Talk and Weak Oil May Put Pressure on Treasuries

Five-Year Notes – The ZFH07 has plummeted over two points over the last month and a half and may not see a recovery anytime soon. There has been a lot of chatter in the bond market this morning, as some large European players are shedding US treasuries in favor of Euro zone bonds. Read More.....

Light US Data This Week

With very light U.S. data due this week, traders look to the Sterling, Yen and cross pairs for emerging trends. The Sterling got quite the upside boost and continues to rally this week from the Central Bank’s move to increase interest rates to 5.25%. Read More....

The New Weather Market...Live Cattle?

The new weather market? Live Cattle futures prices have been tied to the weather forecasts of late, after severe snow and freezing temperatures in the west-central US have caused stressful conditions for livestock at area feedlots. This was the main cause of the recent rally in the February Live Cattle contract to over $94 per hundredweight. Read More....

Friday, January 19, 2007

FX Daily Wrap Up

The British Pound had a bit of a lackluster day, as the United Kingdom’s Retail Sales pummeled expectations with a higher print of 1.1% compared to the 0.5% forecast. The markets, however, reacted contrary to conventional wisdom by moving negatively upon the release. A positive Retail Sales number is generally seen as good news, with traders holding on to long positions or establishing new ones. Today, the GBP instead declined, with technical traders taking profit and overwhelming the fundamentals. The high for the GDP/USD hit 1.9772 before sliding to the current 1.9734. The EUR/USD finished out the week at 1.2962, and the USD/JYP finished at 121.21. Have a great weekend. XPRESSTRADE Analyst David Hilgeman

Thursday, January 18, 2007

Yen tumbles to 4-year low against Dollar

The Yen fell to its lowest level in nearly four years against the Dollar today after the Bank of Japan held off on raising interest rates. The Japanese central bank’s policy board voted 6 to 3 for keeping interest rates at 0.25 per cent. On Monday, analysts were predicting a 25 basis point rate rise to 0.5 per cent, but those expectations reversed in the two days running up to the decision. Reports in the Japanese press suggested that the central bank would continue monitoring consumer prices and personal consumption before deciding whether or not to raise interest rates. There were suggestions that the Bank of Japan may have been swayed by political pressure from the Japanese government, which is terribly worried that a rate rise could harm the country’s economic recovery. As we move into the evening, the USD/JYP is trading at 121.20. XPRESSTRADE Analyst David Hilgeman

CPI, Housing and Employment in Focus

Dollar Index - The March Dollar Index has rebounded strongly over the last month and a half and may be aided by today's CPI report. An improving housing market, a strong stock market and inflationary producer and consumer prices may cause the Fed to get out of its slumber and begin a new tightening cycle. Read More.....

Anticipating Stockpiles Pushes Crude Higher

Crude Oil managed to trade higher yesterday in anticipation of today’s Energy Information Administration report on stockpiles. Nearly $10 has been trimmed from the price of a barrel of Crude in 2007, as the high of the year for front month February, $61.55, was posted on January 2nd . Read More.....

CPI Reports Meets Analyst Expectations

The consumer price index, reported by the Labor Department this morning, was reported at 2.5%, in-line with analysts expectations. The increase is the best performance since a 1.9% reading in 2003. The index gauges the changes in pricing of goods and services purchased by the household consumer, and can be used as a measurement of inflation against the cost of living. Read More......

Fund Buying Supports Corn

Commodity fund buying continues to support Corn: Up, up, and away is the only phrase to describe the Corn futures market, as commodity fund buying sent the most-active March contract to an all-time high price for a March Corn contract. However, the record high prices were gained on low volume and when selling hit the pit prices tumbled, giving back nearly half the day's gains. Read More....

FX Daily Wrap Up

The polls are in from 2006 and Forex is the hands-down winner, with volume up 45% over 2005 and more than 287% since 2001. More volume means more liquidity, and liquid markets provide more short-term trading opportunities while being less prone to large whipsaws of volatility. Still, how to apply these benefits to trading is the million dollar question. Professional traders normally adjust their parameters in a shorter cycle with better range-bound trading. Looking at today’s markets, the USD/JYP is in a holding pattern waiting for a possible rate hike, with Japanese policymakers holding their annual meeting to set direction for the currency. A strong Yen is not necessarily a good thing for Japan – higher cost of exports decreases the competitive balance in the market and ultimately reduces export sales. However, if the Yen remains at its current “cheap” price, it is possible for new growth and opportunities to arise, including expansion beyond projected growth. The USD/JYP is currently trading at 120.64, only 10 pips below the open. XPRESSTRADE Analyst David Hilgeman

Wednesday, January 17, 2007

Equities in Focus During Report Heavy Week

S&P – March S&P futures rallied over the last three days to make new contract highs yesterday. Last week the technical outlook looked grim for the equities, namely the S&P, which looked as though it may have double-topped. As of the close of electronic trading this morning, the market was off two and a half points, erasing overnight gains, as the PPI data was inflationary. Read More....

Prices Flying High!

PPI shows prices flying high! With a slew of economic data on tap this week, traders begin their focus on how the figures will play out when the Federal Reserve meets at the end of January. First off was today's release of the Producer Price Index for December. Read More....

Don’t Believe Everything You Read

A reversal of fortune for the Dollar seems to be brewing, but it’s a hard sell to those watching other indicators than just fundamental economic data. Dollar-related event risk today includes a large number of reports, including PPI, TIC, Industrial Production, Fed Beige Book, and speech after speech from Fed Reserve board members Mishkin, Yellen and Poole. Read More.....

Tuesday, January 16, 2007

FX Daily Wrap Up

The Japanese economy is looking for a rate hike in as little as 3 days. In the past few weeks, the Nikkei 225 index has gained 0.9 percent to reach 17,209.92, while the broader Topix Index has reached an eight-month high, up 1.1 percent to 1,704.58. Armed with abundant data and positive gains, the world is expecting the Bank of Japan to raise rates at the end of its two-day monetary policy meeting that ends on Thursday. The Yen has had strong gains against the US Dollar for the past year and has held steady against the Euro. The only decline is the current leader, Great Britain’s Pound. Looking ahead, the Yen is believed to be in range-bound trading with good liquidity, with the aforementioned rate hike the only foreseeable bump in the road. Currently, the USD/JYP is holding steady at 120.63 as we move into the Asian trading session. XPRESSTRADE Analyst David Hilgeman

Sugar Rush

Sugar rush: Sugar futures closed higher in a volatile session in which an initial rally was cut short and prices fell to 3 1/2 month lows before a sharp rally in the final minutes of trading sent prices to end the session higher. The last half-hour of trading alone saw prices rise just over 30 points. Read More.....

After All the Recent Euro Talk, British Takes Center Stage

British Pound: The British Pound is coming off a very strong week fueled by a surprise rate hike by the Bank of England, leading the foreign currencies in early trading. That rate hike, coupled with indicators showing a strong expected economic growth rate, has helped fuel the bull market for the Sterling, which is trading at its highest levels in fourteen years. Read More.....

Good Vibrations For The Dollar

The good vibrations keep the greenback in motion to the upside against the Euro, Yen and Canadian Dollar. Across the board, the Dollar has clawed its way back on top, bolstered by rosy economic data. Opposing markets are not getting help from fundamental reports or surging commodity markets. Read More.....

Cotton Confusion

Cotton confusion: Cotton futures continue to confound traders, as a bearish USDA crop production report was met with willing buyers, allowing prices to close higher on Friday. The USDA raised US Cotton production to 21.7 million bales, up 2% from the previous report. Read More.....

Orange Juice Jumps Above $2

Juice Jumps above $2: Orange Juice futures posted sharp gains today, closing above the psychologically important $2 level, after the USDA left the estimate for Florida's Orange crop at 140 million 90-lb boxes. This came as a relief to many traders who were blind-sighted by the 5 million box increase in the previous report. Read More.....

Friday, January 12, 2007

FX Daily Wrap Up

As the FOREX week comes to an end, one can’t help but notice the US Dollar holding onto its current gains. From the beginning of January, a 400-pip rally against the Euro has given many traders a bright start to the New Year. Positive economic data, including a substantial job increase and increased exports, is only part of the reason the bulls are in control. Today, Chief Cabinet Secretary Shiozaki’s commentary on the Japanese currency weighed heavily on the market. Japan has decided to hold steady at a current rate of 0.25 percent despite internal and market pressures – it appears that the Bank of Japan has its own agenda and will not be swayed by popular opinion. As the week closes, the Yen is trading at 129.15 versus the USD. Have a great weekend. XPRESSTRADE Analyst David Hilgeman

Corn Is King

Corn: Corn is king in the grain room today at the CBOT. The USDA reported that the 2006-07 corn production was 10.535 billion bushels, well below the 10.745 billion bushel projection made by the agency back in November. Corn stocks were reported to be 8.93 billion bushels, below the December 2005 level of 9.185 billion bushels. Read More.....

Dr. Martin Luther King Jr. Holiday Trading Schedule

Will Grains Be Golden in 2007?

USDA lowers Corn and Soybean crop estimates! This morning's USDA crop production estimate has provided some surprises to traders and analysts, with the government lowering the final estimate for the 2006 US Corn crop to 10.535 billion bushels, vs. the 10.745 billion bushel estimate in November. Read More....

Waves of Sentiment For The Dollar

The waves of market sentiment for the Dollar are crashing against the Euro and Yen in a volatile overnight session. Yesterday the buck made a 13-month high against the Yen and a 7-week high against the Euro, but was hammered by the Sterling. Read More....

Corn Bears Run For Cover

Corn bears run for cover ahead of USDA report: Corn futures regained nearly all of 2007 losses today, as "massive" short-covering buying ahead of Friday's USDA crop production and supply/demand report caused prices to hit the day's limit. Many traders were nervous to sell the market before what is expected to be a bullish USDA report. Read More.....

Thursday, January 11, 2007

FX Daily Wrap Up

The Bank of England was in rare form last night, taking the surprising step of increasing rates by 25 basis points to 5.25%. In the accompanying statement, the central statement quoted was "growth continues at a firm pace," and risks to inflation appear more to the upside. The effect on the majors included the GPD/USD shooting up to 1.9535 before falling back to the current 1.9450, and the EUR/GDP dropping to .6650 before trickling down to .6626 to close out the American sessions. The UK’s economy has shown remarkable resiliency over the past several months – with a strong showing in the consumer sector and a recent rebound in retail sales, the Bank felt inclined to raise rates in hopes of slowing down growth and preventing exports from being priced out of the global economy. A firm labor market and near double-digit increase in housing has provided almost no concern for a decline in the currency – the sole purpose of this rate hike is to slow the output to keep the Pound as competitive as possible. XPRESSTRADE Analyst David Hilgeman

$55...$54...$53....

Crude Oil: February Crude Oil futures are lower in early trading, with no sign of life from the bulls. In a week where Crude prices were supposed to be catching a break from a long-overdue cold front, prices have fallen over $2.50 a barrel. The anticipated cold-front proved to be weaker-than-expected, leaving the bears plenty of ammunition to gun-down prices. Read More.....

Pounding the Dollar

An unexpected 25 basis point increase for interest rates by the Bank of England caught Pound traders off-guard overnight, as analysts anticipated the rate increase in early February. The United Kingdom made the midday move to 5.25% in order to stave off inflationary pressure. Read More.....

A Nickel For Your Thoughts

A Nickel for your thoughts! One of the best performing commodities in all of 2006 was Nickel, which posted gains of 144% last year. Now as 2007 begins, Nickel prices have fallen back from all-time high prices, as speculative selling by index funds due to the rebalancing of the Dow Jones-AIG Commodity Index have kept buyers at bay. Read More....

Wednesday, January 10, 2007

FX Daily Wrap Up

The US Dollar looks to have made both a technical and fundamental change against the world’s majors. Today the EUR/USD rallied up to new resistance at 1.3200 before swinging a 70-pip move towards new support near 1.2930. The million dollar question is whether the Dollar will remain below the mental block of 1.3200. If it does, most expect to see a bullish Dollar moving into and out of the tax season. On the other hand, if it doesn’t, many traders would expect to see range-bound trading hovering and testing defined support and resistance numbers. The main reason for a shift is the release of the Commerce Department’s measure of the trade deficit. Dollar bulls saw the balance of $58.2 billion deficit compared to the $58.8 figure in October, which is the smallest net outflow since July of 2005. A closer look at the different categories made the news even brighter. Total imports over November grew only 0.3 percent to $183 billion, as the crude bill shrank to $21.5 billion, the smallest since 2005. The biggest news was that exports reached a record growth of 0.9 percent to $124.8 billion. Encouraged by a drop in the Dollar and strong European-region growth, the increase in shipments abroad was seen in many of the key industry groups. Last but not least was a positive gain in the trade deficit with China. From a record $24.4 in October, the $22.9 balance should ease many of the harsh trade restrictions imposed by Washington on commodities from China. The EUR/USD is currently trading at 1.2934 heading into the Asian trading sessions. XPRESSTRADE Analyst David Hilgeman

Modest Gains for Coffee Futures

Coffee futures posted modest gains this morning, as local and index fund buying emerged once the March contract failed to take out recent lows. March Coffee made 7-week lows just yesterday at 118.00, as continued strong exports out of Brazil and a larger than expected crop out of Vietnam had speculators liquidating long positions. Read More.....

Crude Bears Down

Crude Oil: February Crude Oil futures are lower in early trading, with the contract testing the $55 mark. Crude Oil fell 45 cents on Tuesday, but ended the day well off its low of $53.85 a barrel. Crude Oil inventory data is scheduled to be released at 9:30 AM CST, and inventories are expected to climb by 82,000 barrels. Read More.....

U.S.Trade Deficit Data Helping Dollar

U.S. Trade Deficit data was reported this morning at an 18-month low at $58.23 Billion, which helped the Dollar sustain prices below 1.2980 against the Euro. The resistance point has seen a few false breakouts during light trading this week, and more positive data will help the greenback gain ground against the majors. Read More.....

Oil Leak

Oil leak! As 2007 begins, Crude Oil prices are much closer to $50 than the $100 a barrel many forecasters were looking for in early 2006. This proves once again that no market can go straight up, despite what so called "experts" say. Oil is no different than any other commodity, where the forces of supply and demand eventually win out. Read More.....

Tuesday, January 09, 2007

FX Daily Wrap Up

The GPD/JYP cross had a nice trending day. Great Britain produced a higher than expected BRC retail sales report, which helped move the pair higher in the early morning trading session to top out at 231.90. As mentioned in previous reports, the Pound is playing at the top of its game, meaning it is highly valued against major counterparts like the Euro, Yen, and US Dollar. This is a double-edged sword, however, as higher cost for British exports might price them out of some markets and result in a substantial risk for inflation. Today’s numbers are viewed as bullish for the Queen’s Money because retail sales came back higher than expected, with clothing and footwear in particular picking up before and after the Christmas holiday. The strong sales provide a reason for a possible Q1 rate hike by the Bank of England, but for the time being the good times continue to roll. The GPD/JYP trades at 231.50 heading into the Asian sessions. XPRESSTRADE Analyst David Hilgeman

Fund Selling, Trips Up Corn Rally

Fund selling trips-up Corn rally: Corn futures took it on the chin this afternoon, as a commodity wide sell-off tied to speculative liquidation weighed on the market. The selling started in after-hours electronic trading, as traders exited long positions on word that commodity index funds were holding a larger than expected long position in Corn futures. Read More.....

Bearish Beans!

Soybeans: The March contract lost another 7 ¼ cents in overnight dealing to last change hands at $6.70. The new CFTC report shows non-commercial traders being long the market, adding pressure to the downside as stops are tripped. Another key to the price puzzle for Soybeans is the fact that the CFTC reported that index funds have a record high long position in commodities. Read More....

Copper Fall May Be Near An End!

Copper fall may be near an end! The start of 2007 has not been kind to Copper bulls, as the most-active March contract has already shed nearly 40 cents. A stronger US Dollar, commodity fund selling, and increasing supplies in LME warehouses are all reasons given for the recent declines. Read More.....

Dollar Continues to Gain Strength

The Dollar continues to gain strength against the majors, hitting a 6-week high against the Euro. The modest rally lends credence to the theory that January has historically been a strong month for greenback performance. Early short-term speculators see the Dollar in a positive light to begin the year, and Fed comments from Atlanta Federal Reserve Vice President Donald Kohn helped steady the course for the inflation sensitive currency. Read More.....

Cattle Continues to Stampede Higher!

Cattle continues to stampede higher! Bulls are firmly in control of the Live Cattle futures market, as commodity fund buying tied to weather forecasts for continued stormy weather in the Great Plains has sellers nervous. Feedlot operators have reported losses of several thousand head of Cattle due to severe winter weather the past few weeks. Read More.....

Monday, January 08, 2007

FX Daily Wrap Up

After last week’s major US Dollar rally, many traders (including this one) were expecting a bit more movement from the EUR/USD pair today. A tight 60-pip range offered few short-term trades and seemed reminiscent of last year’s mid-August meltdown, when ranges dried up and left traders scrambling for any movement. A new two-month low was hit at 1.2971, which last traded mid-November, but there were not enough bull Dollars to hold the position and the pair advanced back up above 1.300 within a half hour. Touching below established resistance is often seen as an indication of which direction the market will eventually take. In the EUR/GBP, a slow bearish market moved the pair to a 40-pip gain for Great Britain. With little news today, ranges dried up and most likely will remain steady – the pair is currently trading at .6719 as we move into the Asian sessions. XPRESSTRADE Analyst David Hilgeman

Friday's Unemployment Report Creates a Stir

The Japanese banking holiday left the Yen and cross pairs mostly range bound from Sunday’s open, and the Euro is settling into a tight range against the Dollar. The strong U.S. employment report from Friday created quite the stir for the greenback, gaining over 300 pips since last week. Read More.....

Cold Weather Frosts Crude Bears

Crude Oil: February Crude Oil futures are higher in early trading, as cold weather forecasts finally arrive. Friday saw Crude Oil end a recent skid that brought the contract back near $55 a barrel. With temperatures finally expected to drop below normal in the U.S. this week, heating fuel demand is expected to rise. Read More.....

Soybeans Stagnate

Soybeans remain range-bound, but for how long? Going into the start of 2007, Soybean futures continue to be stuck in a 50-cent trading range, as traders weigh a large South American crop against potentially lower US Soybean acreage. All eyes will be on this Friday's release of the USDA crop production report. Read More....

Friday, January 05, 2007

Softs Fall

Lead month March Coffee fell to 6-week lows this morning, as commodity fund selling triggered resting speculative sell-stops which contributed to the rapid price decline. Coffee exports from Central American growers are expected to increase in the first quarter of 2007, which should produce origin hedge selling on any rallies. Read More.....

Daily FX Wrap Up

Traders were cautiously building up the EUR/USD pair in the early morning European session before the release of the Non-Farm Payroll Report. Most of the Eurozone data printed largely in line with expectations and was generally seen as positive. The Euro hit a high near 1.3105 before the US numbers dropped the market 100 pips to a low of 1.2980. Job growth in the month of December was quite strong with over 167,000 new jobs added to US payrolls, and average hourly earnings posted a slight increase. The impact of the report shows that the Federal Reserve might hold off on raising interest rates until the second quarter, as current data suggests that the economy can handle the current 5.25 percent. Heading into the weekend, it’s clear that the US news trumps most of the European Union’s releases. EUR/USD traded at 1.3001 at the close and has many bullish Dollars eagerly anticipating Sunday’s open. XPRESSTRADE Analyst David Hilgeman

Pound Losing Ground

The British Pound continues to lose ground to the Dollar in 2007. After posting a 1.9749 high versus the Greenback on Tuesday during the Asian session, the Cable turned tail and proceeded to auction lower the rest of the week. In today’s European session, the Sterling posted a new yearly low of $1.9285 per Pound. Read More.....

Warm Weather Cools Off Oil Prices

Crude Oil: February Crude Oil futures are trading relatively flat in early trading, as investors may be looking to catch their breath after a heavy two-day sell-off. Yesterday saw February Crude Oil futures fall another $2.73, to settle at $55.59 a barrel. Read More......

Rebounding Employment for 2007

Employment rebounds as 2006 ends. The Labor Department had good news for workers to end 2006, as non-farm payrolls grew by 167,000 jobs in December. This was higher than the 115,000 job increase most traders and analysts were expecting. There was also an upward revision for November's figures to 154,000 jobs, and October's rose to 86,000 jobs created. For all of 2006, 1.8 million jobs were added. Read More.....

Thursday, January 04, 2007

Crude Falls Again!

Natural Gas: Lead month February Natural Gas futures finished the day nearly unchanged, down just 1/10 of a cent to close at $6.162 per million British thermal units. The range on the day was $6.13 to $6.45, low to high. When trading commenced at the NYMEX this morning, the market opened higher at $6.22 and spent the early morning testing the upside despite the sell-off occurring across the aisle in crude oil and the products. Read More.....

Daily FX Wrap Up

Waiting for the NFP

The US Dollar surged once again in the early morning trading session, smashing the Yen, Euro, and Pound by roughly 100 points. While today’s news releases were as packed as yesterday’s, the impact on the market was almost nonexistent. The Dollar continued a gradual decline, hitting 1.3075 against the Euro. What may seem odd from a fundamental approach is that news out of the Eurozone and UK was not horribly negative, while reports out of the US continue to point to a potentially dreadful Non-Farm Payroll figure for Friday. The highly-anticipated NFP Report is expected to show a near-record decline, and if the markets follow through with their anticipated reaction, the last two days of gains for the Dollar could disappear. Also expected for the near future is a drop in US interest rates and an increase from the Bank of Japan and the European Union – coupled with positive data, this would give the US Dollar a bit of staying power for the upcoming year. As we move into the Asian sessions, the US Dollar is currently trading at 119.02 versus the Yen and 1.3080 against the Euro. XPRESSTRADE Analyst David Hilgeman

Oil Fire

Crude Oil: February Crude Oil futures are trading lower in early trading, as the contract continues its fall. Yesterday saw February Crude Oil futures fall $2.72, to settle at $58.32 a barrel. This is Crude’s lowest closing price in six weeks. Read More.....

Strong Dollar In Overnight Trading

The Dollar remained firm during overnight trading, thanks to both yesterday’s strong Factory Activity Report and profit taking. However, Dollar strength will likely wane amid the data set for release ahead of Friday’s always-volatile non-farm payroll report. Read More....

Slippery Slope!

How low can it go? Crude oil lost nearly $3 a barrel yesterday and continued lower in overnight dealing. With $60 now in the rearview mirror, the question remains as to how low the price can go. Crude last changed hands at $57.39, down 93 cents from Wednesday’s close. Read More....

Wednesday, January 03, 2007

Corn Bulls Get Slaughtered

Corn bulls get slaughtered. Front month March Corn futures touched the 20-cent limit down level during today’s session to settle at $3.70 ½, down 19 ¾ cents. The range on the day was $3.82 ¼ to $3.70 ¼ , high to low. The inability of Corn to make new highs late last year speaks volumes, as the markets tell participants so much by what price does not do. Read More....

Daily FX Wrap Up

The biggest news today was, and still is, anything paired with the US Dollar. Yesterday’s Dollar decline appeared to be a full technical swing toward the Euro, which hit a high near 1.3300 and surprisingly held its position into the Asian trading sessions. Today’s retort demonstrates a move headed by data or fundamental reasons, and for many traders holds a greater potential for a longer-term trend. The holiday season tends to reduce the amount of economic news impacting the markets, but this week is uncharacteristically stacked with market-altering information. First up, the FOMC Minutes stated that the economy is still a bit flat, news that was nevertheless received as much improved over the last release. In addition, November’s construction spending was also favorable for the US Dollar, as it contracted for the third consecutive month. This was a smaller dip than expected, and the report showed a big upward revision to October – initially, the 1.0 percent plunge in October represented the biggest drop in over five years, but the adjusted 0.3 percent slip was well within normal bounds. The EUR/USD is currently trading at the 1.3160 level heading into the Asian Sessions. Tomorrow we shall see if the Dollar’s gains are kept. XPRESSTRADE Analyst David Hilgeman

S&P Poised To Open on a Positive Note

Crude Oil: February Crude Oil futures are trading lower in early trading, as the contract continues to hover around $60 a barrel. Mild winter weather continues to be the focus of traders, as forecasts remain mild for the Northeastern U.S. The Energy Department is scheduled to release its weekly inventory report tomorrow, one day later than usual, because of the New Year’s holiday. Read More.....

Non-farm Payroll Weighing on the Dollar

Rumors of a hard landing for the U.S. economy and negative non-farm payroll expectations for this Friday’s report are weighing on the Dollar this morning. German unemployment data came in strong, dipping 0.4%, and new claims fell to 108,000. Read More.....

Wheat Wacker!

March Soft Red Winter Wheat in Chicago lost 15 cents per bushel in overnight dealing to last post a price of $4.86. The losses come in the face of key reports from the USDA due out January 12th outlining US stocks of wheat as of December 1st and winter wheat acreage estimates. Read More.....

Pound Makes A Sterling Start

The Pound marks a sterling start to 2007. March British Pound futures began the year on a positive note, as the contract gained 170 ticks to settle at $1.9742 in a truncated session in memory of late President Gerald Ford. The day’s range was $1.9676 to $1.9750. Read More....

Tuesday, January 02, 2007

Woes For the Euro

Euro: Dollar woes continue with the advent of a new year. After closing at $1.3236 to end 2006, March futures gapped higher last night by nearly 3/5ths of a cent to start the New Year at $1.3310. Dollar fundamentals are still weak, with record current account and trade deficits for market participants to digest. Read More....

Daily FX Wrap Up

Over the past few months, the vast majority of entries to this blog have focused on the US Dollar’s decline and subsequent rebound against its major counterpart, the Euro. One of my resolutions for the New Year was to broaden my scope to look beyond the Dollar, and although today is the first opportunity of 2007 to enact this new policy, I am sad to report that this segment will not accomplish that goal. This is due in large part to the fact that the US Dollar gapped open from last week’s close thanks to the combined effects of the long holiday weekend and the National Day of Morning for former President Gerald Ford on Tuesday.

The EUR/USD pair rose to a five-month high of 1.3291, after an initial 125-pip rally in the early morning session. It is important to remember that the major players (US Banks, most notably) were not open and therefore did not impose their typically huge sway on the market. The rest of the trading week features a healthy dose of news, including the FOMC Minutes, Non-Farm Payroll, and Initial Claims Reports. If these releases are favorable for the US Dollar, it might make the EUR/USD a short-term bear market. This week will be a great opportunity for monitoring the EUR/USD pair for one of two possibilities – a correction from a gapping market, or the continuation of a solid bullish Euro trend. XPRESSTRADE Analyst David Hilgeman

Modest Start for 2007

Liquidity is modest to open the New Year because of the banking holiday in Japan and the national day of mourning for former U.S. President Gerald Ford. However, the European markets are taking full advantage, as the Euro and Pound are hammering the Dollar. Read More....

Gold Gains As 2007 Begins!

Gold gains as 2007 begins: Gold bulls started out 2007 on a high note, as a continued weak US Dollar coupled with increasing fears of political tensions in the Middle East and Asia have traders moving into the Gold market. Front month February Gold moved to 3-week highs this morning, moving past resistance at $640 an ounce in thin post holiday trade. Read More.....