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Wednesday, February 28, 2007

If the currency markets were pinball …this would be full tilt!

After yesterday’s volatility, which turned many markets into steep slopes, today’s first priority was to assess damage control. The US Dollar woke up to a disappointing first revision of fourth quarter GDP. Initially coming across the wires at 3.5 percent in late January, the GDP revision offered a considerably lowered 2.2 percent annual pace. In terms of expectations, this was only slightly below the market’s official 2.3 percent consensus, though it does raise considerable concern for the future of the US economy. Comparing the advance and preliminary numbers in the breakdown, declines in investment, inventories and personal consumption were the most concerning. Gross private investment through the three months dropped 15.6 percent, following an initially reported 11 percent decline. This in turn was influenced by a cut in inventory growth from 35.3 percent in the first measurement to 17.3 percent. In addition to the GDP revisions, the Chicago Purchasing Managers Index – a measurement of factory activity in the Chicago area for February – was released, upsetting expectations with a drop to the report’s lowest level since 2002. Last but not least, new home sales completely undid the bullish sentiment underlying the pickup in existing purchases. All in all, it was a rough news day, with surprisingly little movement in the markets. Currently, the USD/JYP is trading at 118.39, and the EUR/USD is trading at 1.3233. David Hilgeman, XPRESSTRADE Analyst

Calm returns....but for how long?

If there was a bullish bright spot to yesterday's financial market liquidation, it was the Bond market. 30-year Treasury futures soared over 2 full points at the height of the stock market sell-off, with investors and traders moving to the interest rate sector on a "flight to quality" buying panic. Read More....

More days like this and we could all speak Japanese

With the big news of the rapid decline in the global equity markets, only a few currency pairs have managed to remain virtually untouched. The British Pound and US Dollar cross saw little if any fallout from a huge day in the markets. Read More.....

China Sends Global Markets Into Tailsp

S&P - Stock indices suffered their worst day of losses since the first trading session after 9/11, as a Chinese stock index collapse led to panic in European and U.S. equities. On a day that also included an assassination attempt on the Vice President, durable goods orders were not even close to analyst estimates and sales of existing homes fell, adding fuel to the selloff. Read More....

Plunge!

That's the sound of falling prices today, as a market-wide liquidation caused near pandemonium in several markets. The Stock Indexes were particularly active on concerns that China will be pulling the plug on the speculative excesses running through the country. Read More.....

Tuesday, February 27, 2007

Equities Turn Sour on Disappointing Data, Debt Fears

S&P – March S&P futures showed resilience, shedding only 1.20 despite comments from former Fed Chairman Alan Greenspan that the US economy is heading toward recession. Current Fed board member Susan Bies did some cheerleading and downplayed some of the recent sub-prime debt fears, saying that the mortgage market is healthy by historical standards and that sub-prime loans only make up 7 percent of the overall mortgage market. Read More...

Dollar loses as a slew of weak data hits the news

In early morning trading, the US Dollar has lost almost 70 pips against the Euro. The only news to be released so far has been the Durable Goods Orders report, which posted a disappointing negative 7.8% versus an expected negative 3%. Read More....

China Syndrome!

US Stock Index futures are sharply lower, following a nearly 9% drop in the Chinese stock market. The Shanghai Composite index fell 8.8% overnight – its biggest drop in over 10 years – on word that the Chinese government has set up a task force to cut down on illegal stock offerings. Read More....

Monday, February 26, 2007

Slow Day, but New Highs for the Kiwi

In the world of forex – which still holds the undisputed title of the “Largest Market in the World” – a rarity occurred in the form of a slow day. Volume, which is typically hard to measure, appeared to be low as most of the majors traded in tight ranges. On the plus side, a dry spot like this is often a great time to reflect and plan future trades, or to explore potentially profitable markets that are often overlooked. Today, the New Zealand Dollar might have hit a turning point, topping out the charts with a high of .7121 and potentially reaching a multi-month peak. A slow and steady rise to the current top has left the Kiwi with only a few options. The first is to hold steady at its newfound support and resistance levels, which is a real possibility with the NZD holding its own with a stronger economy versus many of its rivals. The second is to break into new highs and push even more into uncharted territories, an option that might come true if traders find weaker data from the Kiwi’s counterparts and New Zealand produces a new round of strong numbers to keep this trend going. The third is a slow but steady retraction from this past month’s gains, which would occur if any positive news was released in another part of the world. On a personal note, I find the NZD/USD pair to be a great market with big long-term trends that are a technician’s dream. Currently, the pair is trading at .7096 as we head into the evening session. David Hilgeman, XPRESSTRADE Analyst

Optimistic Federal Reserve view, not optimistic

The United States is facing some big numbers this week in the forms of consumer confidence, existing home sales, new home sales, and a slew of other indicators. Last week, the Federal Reserve painted a bright economic picture to come, but current data does not support these claims. Read More...

Bonds Reach For New Highs

Bonds – The Bond market has been steadily climbing since making lows a month ago. Several factors have contributed to the recent bullish action in the treasury markets, including weakening economic indicators, a slumping housing market and an increase in defaults (i.e. bad debt). Read More...

Spread opportunities in Soybeans

Even though Soybean prices have soared to 3-year highs, many traders believe that the best trading opportunity may lie in the old-crop/new-crop Bean spread. New-crop November Soybeans are currently trading at a 21 1/4 cent premium to old crop July Soybeans, and many traders are citing a number of reasons to believe the spread will continue to widen. Read More....

Friday, February 23, 2007

Big Week / Bad Dollar

This week took its toll on the Japanese Yen and the US Dollar. While the USD rallied against the Yen, the two currencies were lower overall against the rest of the world. The Yen weakened further this morning against the Euro, as speculations on further bullish rate hike possibilities vanished following the Bank of Japan policy meeting on Wednesday. BOJ governor Fukui noted that “the Central Bank does not have specific schedules for further rate hikes.” He repeated today that the rate increase would be very gradual, diminishing expectations for consecutive rate increases. The Euro rose to a record high of 159.59 versus the Yen and the Sterling, while the Loonie and Kiwi both took gains against the Japanese Dollar as well. Big movers this week included the Swiss Franc – with a more than 160-pip move – and the Canadian Dollar. The USD/CAD took 150 for the week in favor of the Canadian Dollar, thanks in part to strong growth and a slew of technical indicators pointing to a bullish Loonie. On the fundamental schedule, we are looking for confirmation from next Tuesday’s Durable Goods and Consumer Confidence reports. As we head into the weekend, the USD/JYP is trading at 121.02, and the EUR/USD is sitting at 1.3162.
David Hilgeman, XPRESSTRADE Analyst

Bank of Japan Rate Increase Spurs Buying

While the economic news releases are finally finished for the week, trading does not appear to be over. The big ticket item was Wednesday’s Bank of Japan rate increase of 25 basis points following a long dry period with growing concerns over deflation and carry trades. Read More....

Red Hot!

Copper futures have once again caught the eye of large commodity funds, as a commodity-wide rally – especially in the base metals complex – has turned trend-following traders bullish on the red metal. March Copper has moved to nearly 2-month highs this morning, as bears have rushed to cover short positions on the belief that Chinese demand will remain strong. Read More...

Citrus Power!

Orange Juice – FCOJ futures soared on fund and speculator buying to hit four-week highs. The recent cold front that hit Florida did not do any significant damage to crops, especially Valencia juice oranges. Market chatter suggests that recent USDA OJ production will be short by 5-7 million boxes, which, if accurate, is a large enough figure to change the fundamental outlook for the foreseeable future. Read More....

Thursday, February 22, 2007

Big Day, Little Results

While news was limited today to early morning trading, sharp swings took place in almost every major market. The Swiss Franc took an early morning dip against the US Dollar, pushing the pair to a high of 1.2435. The US Dollar held onto the gain for less than four hours before the CHF took control and made over a 60-pip move gain to the day’s low of 1.2370. The big Eurozone news in the early morning session was a weak German GDP report, which posted a decrease in domestic demand to lose -1.3% versus a projected increase of 0.5%. This was not enough for the US Dollar to hold any gains, however, and overall the USD dropped around 40 pips across the board. In other European news, the British pound pushed 130 points higher through to noon in New York with little sign of giving up its momentum. The GBP/USD hit a high of 1.9600 and a low of 1.9460. As we head into the evening sessions, the USD/CHF is trading at 1.2385, the EUR/USD is at 1.3121, and the GBP/USD is trading near 1.9562. David Hilgeman, XPRESSTRADE Analyst

Commodities Have a Golden Day

Gold – Gold got a boost from inflationary data and higher Crude Oil prices to rally $23. Crude Oil caught a bid early in the day because of geopolitical concerns, sparking buying in Gold. Tensions with Iran have not eased, and news that Denmark and Britain were planning on withdrawing their troops from Iraq caused concern of widespread turmoil in the oil-rich region. Read More....

They Don't Build Them Like They Used To!

That is the phrase some energy traders have been using to describe the recent rash of production outages affecting the Gasoline market. Gasoline futures have been leading the bullish charge of he energy complex of late, as traders continue to bid up prices tied to outages at several US refineries, most recently a shutdown of a TEPPCO Partners pipeline from the US Gulf Coast to the East Coast. Read More....

Wednesday, February 21, 2007

FX Daily Wrap Up

After much speculation, the Bank of Japan finally made a quarter-point rate hike to .50 percent. While the BOJ was adamant that this rate hike was not due to the external pressures placed on Japan, it is a bit suspicious that this rate hike came after an international G-7 meeting where unofficial discussions about the low value of the Yen came up repeatedly. Growing concerns about carry trades destabilizing the economies of other countries lead to an increase in this non-official pressure. Nevertheless, the markets did not react in a traditional manner and shrugged off the news by trading higher against the majors. After a small drop in the USD/JYP pair, the cross traded up to a multi-day high of 121.10. In other news, the Kiwi has taken charge to hit a new high of .7065 against the US Dollar. Strong domestic growth followed by technical formation made this pair ripe for a breakthrough above current resistance levels. As we head into the Asian sessions, the NZD/USD is holding its gains at .7061. David Hilgeman, XPRESSTRADE Analyst

Mounting Pressures Push BOJ to Rate Hike

The Bank of Japan finally raised rates following weeks of mounting pressure from internal and external sources. The international community has thrown its influence around regarding carry trades, a strategy that involves buying a currency with a low interest rate only to turn around and invest in currencies with much higher interest rates. Read More....

Gold Gets A Reality Check

Gold – Fund liquidation sparked a wave of selling that drove Gold prices lower by nearly $12 in the most-active April futures. Along with the fund selling, a stronger Dollar coupled with lower energy prices had traders running for the hills, as folks on both sides of the market were getting flat before this morning’s CPI numbers. Read More.....

Rate Hike Fails To Support Yen!

Rate hike fails to support Yen! Currency traders were not impressed by the Bank of Japan's announcement that it would raise short-term rates by 25 basis points to 0.50%, as the Yen has fallen sharply against the US Dollar and Euro Currency this morning. Read More.....

Rate Hike Fails To Support Yen!

Rate hike fails to support Yen! Currency traders were not impressed by the Bank of Japan's announcement that it would raise short-term rates by 25 basis points to 0.50%, as the Yen has fallen sharply against the US Dollar and Euro Currency this morning. Read More.....

Tuesday, February 20, 2007

FX Daily Wrap Up

The Euro traded both sides of unchanged today, with sellers helping push price down toward the lower end of the range in the US dealing hours. The Euro traded from $1.3129 to $1.3188, low to high. The Euro has run into sellers around $1.3170 and appears to be overbought on the daily charts. Today’s weak tone going into the close in the US session hints that a turn in momentum may be in the making, as Euro bulls run into resistance and are unable to cross the $1.32 albatross. The past few sessions have left Euro bears and bulls satisfied with Euros changing hands at levels above $1.31. Given the fact that the bulls have been in control of the market since the beginning of last week, it is likely that new weekly highs would lead to yet higher highs as price exploration to the upside has been the predominant activity. Shorts need be cautious of new weekly highs, as that may signal another leg up for the Euro. Resistance comes in at the upper Bollinger band at $1.3176, followed by today’s high of $1.3188, and $1.32. Support is pegged at $1.3120, $1.3190, followed by the 10 day moving average of $1.3088. XPRESSTRADE Analyst, Carl Christensen

Lead Balloons!

Lead balloons! Lead futures on the London Metal Exchange continue their surge higher, reaching new-all time highs today, as traders fear supply problems due to issues at Xstrata's Lead operations in Australia. Though company officials have not disclosed the exact nature of the problem, deliveries from its Northfleet refinery have been restricted. Read More.....

Cotton rally goes soft, Coffee continues to cool

Cotton – May Cotton struggled to hold gains on Friday. May futures rallied 57 points over the past two days as shorts covered and took profit, and some traders established new positions hoping to find value with the depressed prices. Fundamentally, the Cotton market remains weak. Read More...

Yen Under a Microscope

The Yen will be under the microscope this week as traders await a midweek rate decision by the Bank of Japan. Consensus is for Japan’s policy makers to raise the country’s benchmark rate from .25% to .50%, in part because of the country’s strong fourth-quarter economic forecast. Read More...

Silver Bullet Hit A Wall?

Silver bullet hits a wall? Silver futures have been on a tear in 2007, rising just over $1.50 since the lows were made back in early January. Increased speculative demand has been the key reason for Silver's lofty rise, with the introduction of a Silver ETF taking supplies out of the market and into bank vaults. Read More....

Natural Gas Gushes Higher!

Natural Gas gushes higher. Lead-month March futures picked up 19.8 cents to close at $7.49 per million British Thermal Units. The day’s range was $7.40 to $7.62, low to high. Today’s rally was due in part to the extended cold weather forecast, but short covering by skittish bears helped drive prices to the highest levels for the week. Read More....

Friday, February 16, 2007

FX Daily Wrap Up

Friday was a good break in the action from a huge week of market indicators. US Dollar volatility dried up after a bearish week and poor numbers across the board for American statistics. With the approach of the extended holiday weekend in the US, institutional traders seemed to take today’s fundamentals with a grain of salt. However, one last bit of noteworthy economic news was the University of Michigan consumer confidence number. At first glance, the slip from the two-year high of 96.9 in January to 93.3 this month was initially seen as bearish, but in reality the overall level is still near highs. Leaving a bigger impression on the Dollar’s fundamental balance, late-week housing data erased much of the optimism spurred by positive news during the week. As we head into the holiday weekend, the EUR/USD is currently closing out at 1.3138, and the USD/JYP is closing at 119.32 David Hilgeman, XPRESSTRADE Analyst

TGIF-Pairs Wandering Aimlessly

TGIF – A slow night in the world of forex saw many pairs aimlessly wandering in tight ranges. Many traders are looking forward to the American holiday on Monday after this past week’s hectic economic releases. While most of the market reacted in traditional fashion, such a large amount of news and reports might have muddied the waters and not produced the movement that one would expect. Read More....

Copper Surges, Precious Metals Take the Day Off

Copper – Copper gained 8 ¼ cents on news that China imported 147,650 tonnes in January. The other March Copper futures have rallied as much as thirty cents in the past two weeks, after bottoming out at $2.3850. Several floor traders indicated that there were a lot of stops being taken out and short covering, which helped accelerate the rally. Read More....

Yen Rising Sun

Yen rising like the sun. March Yen futures were up four days in a row before stalling in early trade Friday. The week has had a relatively wide trading range, with .8229 and .8438 marking the low and high, respectively. The main reason for the Yen’s rally is the fact that the low interest rate policy in Japan is coming to an end according to government officials. Read More....

New contract high for Soybeans

New contract high for Soybeans. March Soybeans surged to $7.58 ¾, up 8 ¼ cents on the day, off a range of $7.51 ¼ to $7.59 ½. Despite record supplies and the impending harvest in South America, beans made new highs in the face of weaker Corn prices across the aisle at the CBOT today. Read More....

Thursday, February 15, 2007

FX Daily Wrap Up

The New Zealand Dollar had steady gains up until a few minutes before 11:00 CST, when a technical correction took place. The Kiwi took a 45-pip loss in under 30 minutes after making steady gains throughout the last several days. The US Dollar had a barrage of fundamental news today. Export Prices posted a .3% change, which is .2% lower than the previous, while Import Prices showed no change for the last month. Initial Claims were reported, with numbers far surpassing estimates to post 357,000 for this past period. The Industrial Production report showed a -.05% net change, and last but not least, the Philadelphia Federal Reserve Report showed a 2.3% retraction from the month of December. The overall affect from this hodgepodge of information was a bearish day across the board for the US Dollar. The Yen strengthened across the majors after a stronger-than-expected Japanese growth report, which may be the final piece of the puzzle needed to raise interest rates. The figures revealed that the Japanese GDP grew by 1.2% in the fourth quarter, trumping expectations set at 0.9%. There is a strong possibility that the Bank of Japan will raise rates at next week’s policy meeting. Currently, the USD/JYP pair is hovering at 119.20, the lowest it has been in one month. XPRESSTRADE Analyst David Hilgeman

Euro Rides Strong

The Euro rode strong Euro-Zone GDP reports and neutral comments from US Federal Reserve Chairman Bernanke to a huge day yesterday. Traders were trying to read between the lines, looking for the Chairman to signal that another rate hike is scheduled for the near-term, but Bernanke instead took a more moderate stance on inflation and implied that no rate hike was warranted for the foreseeable future. Read More.....

Treasuries Break Resistance

Treasuries forcefully broke upside resistance to reach levels not seen since early January, a day after Fed Chairman Bernanke’s “contained inflation” statements started the upward move. The morning began with more positive treasury data, including initial jobless claims that leapt by 44,000 to 357,000 in the latest week, indicating some labor market weakness. Read More....

Natural Gas Paints a Mixed Picture

Natural Gas – March Natural Gas futures dropped over 12 ½ cents in trading yesterday, with warmer weather expected next week. The East Coast is expected to have warmer-than-average weather for the next 1-2 weeks while in the Midwest, forecasts remain frigid until Feb 21st, when the region is expected to see temperatures rise to seasonal norms. Read More....

Bulls Going Hog Wild

Bulls going Hog wild! Lean Hog futures were sharply higher this afternoon, with new contract highs being made in back months contracts, as steady to higher cash Hog prices and surging Pork Belly futures are all adding to the supportive tone. Buy stops were triggered once the most-active April contract moved above minor resistance at the 68.15 to 68.20 area. Read More.....

Wednesday, February 14, 2007

Daily FX Wrap Up

While the US Dollar had a bit of a sad Valentine’s Day, the rest of the world’s markets received their fair share of cards in the form of little green pieces of paper, with substantial gains coming on the heels of a variety of news reports and market indicators pushing the US Dollar to new multi-week lows. The Euro moved above resistance and jumped to a high of 1.315 – a 125-pip move on the day. Federal Reserve Chairman Ben Bernanke’s semi-annual testimony to the Senate Banking Committee offered insight into the goings-on of the Federal Reserve, triggering a large move across the majors. Later in the day, the market zoned in on the specific phrase that there are initial signs that “inflation pressures are beginning to diminish.” This dovish comment specifically attacks one of the last footholds Dollar bulls have for expecting a return to rate hikes by the end of the year. Bernanke repeated his projection of a possible positive turn in housing, leaving the consumer population to foot the bill for economic growth. Moving to another economic indicator, January Retail Sales fell short of expectations, with no gain whatsoever. This is the first time that inventories have not moved since July of 2005. The GBP/USD breached the 1.9600 mark to hit a high of 1.9645. The Kiwi moved with steady gains and closed out the American session at .6945. Last but not least, the EUR/USD is trading at 1.3127 to close out the current session. XPRESSTRADE Analyst, David Hilgeman

Bulls Looking "Golden"

Technicals controlling the Gold market. Gold futures rose to their highest levels since August of 2006, as a weakening US Dollar and large fund buying have sent prices soaring. Lead-month April Gold hit a high of $675.00 early this morning, as rumors that a large fund was a big buyer of Gold in Tokyo sent bears scrambling to cover losing short positions. Read More....

Euro Marches On

If you are really in tune with the markets, a great Valentine’s Day gift might be a solid prediction to today’s financial numbers. This morning, US Retail Sales and Business Inventory reports are released. Retail sales are traditionally lower under the weight of higher interest rates, but this past year’s cool-off in oil prices has helped stronger sales continue. Read More....

Profit Taking Fails to Bring Down Cocoa

Cocoa – Cocoa futures were able to hold key support areas despite widespread profit-taking. Recent rains across the growing region will help the mid-crop, but much more moisture is needed to ensure a healthy harvest. While the early crop was abundant, there are fears that quality may not be up to par. Read More...

Corn Reaches for the Stars!

Is Corn set to make new contract highs? March Corn futures closed at the highest price since January 18th, as the lead month gained 6 ¼ cents to settle at $4.11 per bushel. The day’s range was $4.04 ½ to $4.11 ½. The March contract tested levels below $4 last week, only to find willing buyers to cut-off the sellers and drive bears back on their heels. Read More....

Tuesday, February 13, 2007

FX Daily WrapUp

The Euro took control in early morning trading and produced a high of 1.3045. Strong European GDP numbers contributed to the gain by posting an impressive 3.3% print versus an expected 3.0%. The total is up .6% over the third quarter 2006 report. In addition to the strong Euro Zone news, the US Commerce Department’s monthly trade deficit grew more than expected to $61.2 billion. Putting the move in context, the rise was the first major move in four months. It has been established that trade deficit numbers do not move the markets, but do lead to a possible big picture. These two factors led to the gains by the Euro over the US Dollar. Looking north, the Canadian Dollar made a 60-point advance on the US Dollar from a bit of technical profit-taking. Current ranges for the USD/CHF pair are hovering near the 100-point mark, but a good intra-day range can see more than a 150-point range. This is great for day traders looking for a wide ranging market with good technical indicators. As we head into the evening sessions, the EUR/USD is trading at 1.3035 and the USD/CHF is at 1.2426. David Hilgeman XPRESSTRADE Analyst

Is The Recent Cold Snap Too Little Too Late for Crude Inventories?

March Crude Oil futures are trading slightly higher in early trading, after the International Energy Agency increased its forecast for global oil consumption this year. However, this news comes in the wake of yesterday?s $2.07 decline. Yesterday?s pressure came from comments by the Saudi Arabian Oil minister playing down the likelihood of additional production cuts from OPEC in their March Meeting. Read More....

Euro Gains

The Euro made gains from a better than expected Gross Domestic Product Report. The Euro-Zone received a boost from a 3.3% print versus the expected 3.0%, both of which were significantly better than the 2.7% of the previous quarter. Read More....

Crude Runs Out of Gas

Crude Oil – Crude Oil shed over $2.00 yesterday, with warmer weather forecast and Saudi Arabia signaling that further production cuts are not needed. Last week’s inventory data showed a large supply of Heating Oil, which is enough to get us through the rest of the winter. Read More...

Oil Falls Over in Barrels

Crude Oil trades lower across the board. Lead month March Crude lost $2.08 per barrel to settle at $57.81 off a range of $59.10 to $57.40, high to low. Forecasts for warmer weather, coupled with the OPEC announcement of no output cuts planned for March, gave bears reason to sell. Read More.....

Monday, February 12, 2007

FX Daily Wrap Up

A rather light day of trading in the majors after this past weekend’s G-7 meeting in Germany. Many traders were expecting a bit of a boost in the forex markets – particularly the Yen – based on the hawkish comments from many of the Finance Ministers and World Bank Presidents. Both European and Japanese delegates warned traders against “one-way bets,” a clear allusion to the “carry trade” investment model – the practice of borrowing in a low-yield currency to invest in higher-yielding one. The European Finance Ministers went a step further with a carefully-worded speech indicating that the Yen may fall too far below the Euro, threatening to seriously dent European exports. After a brief push up to the 122.10 level, there was not enough support to be found and the multi-day high fell back to 121.75 for the majority of the day. Even without the Yen’s weakness officially on the agenda, there was nevertheless quite a bit of speculation that pressure would be placed on Japan to raise the price of the Yen. Across the big pond, the US Dollar gained an impressive 65 pips against the Euro. This decline in the pair was seen in early morning trading, following a brief touch of the day’s high of 1.3035. As we head into the evening sessions, the USD/JYP is at 121.85, and the EUR/USD is at 1.2959. David Hilgeman, XPRESSTRADE Analyst

Gold Leads Precious Metal Charge

Gold – Gold futures were supported by higher commodity prices across the board, signaling the possibility of inflationary pressure moving into the economy. Also helping support the prices of precious metals was Iran’s statement that it would attack US interests abroad if provoked. Read More....

Yen Makes A Run

The Yen has experienced a nice run-up in the overnight markets, pushing to the 122.00 level from this past’s weekend’s G-7 meeting. The highly-anticipated meeting in Germany did not have the weakness of the Yen on the agenda, but accompanying statements did make indirect reference to the current situation. Read More....

Is It Aluminum's Turn To Shine?

Is it Aluminum's turn to shine? 2006 was the year of the base metals complex, with Nickel, Tin and Zinc reaching all-time high prices. Now there are signs that another member of the complex might be ready to make its move -- Aluminum! Guinea, one of the key producers of bauxite, one of the raw materials used in the production of alumina, is in the midst of a nationwide strike in protest against President Lansana Conte's rule. Read More....

Friday, February 09, 2007

Got Grains?

Corn – March Corn futures jumped seven and a half cents on short-covering before this morning’s USDA report, aided as well by a late rally in Crude Oil that helped the commodity markets in general. Despite some traders hyping up the report, it will probably be a non-event for corn with the figures falling in line with previous estimates. Read More....

The Euro Keeps on Giving

The Euro gave back much of yesterday’s gains after a European Central Bank survey noted a drop in housing loans issued for the fourth quarter of 2006. The Euro-Zone is apparently learning that the higher interest rates associated with the Euro are squashing the individual consumer’s possibility of home ownership. Read More....

No soft landing for Cotton

No soft landing for Cotton! Bears remain in firm control of the Cotton market, as weak exports and heavy speculative selling continue to pressure prices. The key to the price slump has been weak exports. So far for the 2006-07 marketing year, Cotton exports are totaling only 3.861 million bales, compared to last year’s 5.975 million bales this time last season. Read More....

Bulls Win With Tin

Bulls win with Tin! On a day when the base metals sector was weak, Tin shined brightly for metal bulls, as speculative buying tied to tight supplies continued to support the market. London Metal Exchange stocks fell 115 tons to stand at 10,610 tons today – their lowest level in nearly 15 months. Tin has been one of the best-performing markets in 2006, with world consumption up nearly 9% in 2006 according to a survey from ITRI, a Tin industry organization representing Tin producers and smelters. Read More.....

Thursday, February 08, 2007

Natural Gas Supplies at Record Highs Despite Weather

Natural Gas – Natural Gas traded lower yesterday, with the March futures remaining in the coiling congestion area just below resistance at 8.050. While the weather outlook for most of the country remains cold for the next two weeks, supplies remain at record highs for this time of the year. Read More....

Metal Mania Continues

Metal mania continues! Heightened volatility is becoming the norm for the Platinum market, as disruptions to supplies from South Africa combine with solid industrial demand to keep prices buoyant. Platinum straddles the market between an industrial and precious metal, with increased jewelry demand – especially from Asia – and its use in catalytic converters consuming almost all of global production. Read More.....

The Pound Keeps on Giving

The Pound gave back much of its recent gains based on the decision of the Bank of England to leave rates unchanged. Traders who had speculated on the possibility of a second straight surprise rate hike dumped their positions, causing a rapid decline to the current low of 1.9575. This sharp sell-off came after a day of mixed trading and a slight gain. Read More....

Cocoa Pops!

Cocoa pops! New York Cocoa futures soared to nearly 7-month highs this morning, as continued buying by commodity funds and speculators boosted prices. Prices gapped higher this morning following higher prices in London, and speculative buying then moved the market through resistance at 1680 in the March contract, triggering buy stops along the way. Origin sales were light as the harvest of the main Cocoa crop in the Ivory Coast and Cameroon winds down. Read More....

Wednesday, February 07, 2007

FX Daily Wrap Up

The Euro pushed higher against its counterparts today, moving to a high of 1.3024 against the US Dollar and soaring to 167.27 verses the Austrian Dollar, despite disappointing data. With Germany’s and the United Kingdom’s Industrial Production reports missing their forecasts, the Euro seemed to have disregarded any fundamental factors. In the UK, the I.P. recorded a reading of negative 0.1% versus the positive 0.2% that was expected. Large declines in oil and gas production were a primary reason for the low numbers, with an additional 3.7% drop in quarrying and mining alone. As mentioned in this morning’s report, the Yen remains buoyant with the upcoming G-7 meetings. Today the Yen gained on the Dollar and the Euro, pushing to a new three-week high. With US and Japanese officials downplaying the possibility of any substantive discussion of Yen weakness at the upcoming G-7 meeting, traders returned to the “carry trade,” steadily buying EUR/JPY and the USD/JYP from the start of the European session. As we head into the Asian session, the USD/JYP is trading at 120.68.
David Hilgeman, XPRESSTRADE Analyst

Recent Cold Weather Takes Back Seat to Inventory Data

Crude Oil – March Crude Oil finished only 14 cents higher in yesterday’s trading despite flirting with the $60 mark earlier in the day. Traders took profits and closed out positions before today’s petroleum inventory report, which is released at 9:30 AM CST. Read More....

Yen Hits 3 Year High

The Yen hit a three-week high against the US Dollar and the Euro yesterday, as Japan’s currency continued to receive support ahead of this week’s G-7 meeting. The G-7 is a group of finance authorities and central bankers from seven major industrialized nations. Read More....

Day of Reckoning For Energy Bulls

Day of reckoning for energy bulls! After two failed attempts to take out the $60 level in March Crude Oil, energy traders are pinning their hopes on a bullish EIA energy stocks report this morning to provide the fuel to launch Oil prices through this formidable barrier. Read More.....

Tuesday, February 06, 2007

Sugar-coated Sell off

Sugar-coated Sell-off: World Sugar futures continued to struggle, falling to 4-month lows for the lead month contract, as heavy commodity fund liquidation and spread trading dominated the session. Floor sources report that speculative sell stops were triggered once the March contract fell below 10.30. Read More.....

FX Daily Wrap Up

The US Dollar had a tough day against most of the majors. The EUR/USD gained almost 85 pips to reach a high of 1.2989 in a steady climb. A possible fundamental reason was a speech by Treasury Secretary Henry Paulson on the US economy. Paulson first offered his views on President George Bush’s proposed $2.9 trillion budget for 2008, saying that the US is “transitioning from a period of above-trend growth to a more sustained level of above 3.0 percent.” This might have had direct reaction in the markets because of the above-average acceleration in the fourth quarter GDP, which topped out at 3.5 percent. The implied message was that the United States should expect a slower national growth to something far more sustainable. High growth times often produce drastic highs and lows with a large amount of uncertainty, often destabilizing an economy.

Looking to the Far East, the Japanese Yen did gain against the US Dollar today, but not nearly as much as the other majors. The main reason is that the Yen is currently trading at its lowest rate in four years. With the upcoming G-7 meeting, many analysts are expecting to see a bit of pressure placed on Japan to intervene and raise the rate of exchange for its currency. As we head into the evening session, the USD/JYP is currently trading at 120.09. David Hilgeman, XPRESSTRADE Analyst

Funds Continue to Fuel Grain Rally

Soybeans – March Soybeans made new contract highs on a combination of fund buying and an independent report showing lower acreage. The ProFarmer survey had Soybean acreage down by as much as 8.5 million acres. Corn has been the driving force for the recent Soybean rally, as the attractive prices of Corn could sway some farmers to plant Corn on land that would otherwise be used for Soybeans. Read More....

British Pound Rebounds

Yesterday, the British Pound declined in early-morning trading following a bearish January CIPS PMI report. The expected reading of 60.6 versus the actual of 59.2 sent the cable through the 1.9600 mark. The GBP/USD pair quickly regained those losses today on a favorable report by the British Retail Consortium survey posting the strongest January sales in three years. Read More....

Yen In The Spotlight Again!

Yen in the spotlight again! Currency traders should expect a volatile week, with talk that Group of Seven officials will focus on the weak Japanese Yen at their meeting in Germany this week. Yen futures moved to 3-week highs this morning, as traders were busily covering short positions ahead of this week’s meeting. Read More.....

Monday, February 05, 2007

Oil Leak!

Oil Leak! Oil futures fell moderately this afternoon, as profit taking selling emerged once the lead-month March contract failed to take out the important $60 level. In addition, a comment from Nigeria’s oil minister that OPEC will likely keep its output unchanged at its next meeting spurred further long liquidation. Read More....

FX Daily Wrap Up

The EUR/USD traded in tight ranges today after shrugging off its only major indicator – the Institute of Supply Managers’ non-manufacturing report. Not even the better-than-expected print could move the market from its well-established technical levels, even though the ISM service sector report was expected to sway the market in favor of the US Dollar. With January’s survey jumping to an 8-month high of 59.0, the bulls should have been in control, yet a modest 15 pips later, they hardly produced the expected results. Service-based businesses make up an estimated 80 percent of the US economy, and the read was an affirmation for the Federal Reserve policy board that the economy is indeed growing at a “moderate” pace in the medium-term. As we head into the Asian session, the EUR/USD is trading at 1.2928 in what appears to be light trading. David Hilgeman, XPRESSTRADE Analyst

Copper Meltdown

Copper – Copper futures, along with most of the metals complex, had a major sell-off on Friday sparked by hedge fund liquidation rumors. On the LME, only Nickel was able to finish positive, and Zinc was the major loser with a 10 percent loss. Read More....

British Pound Plummets

The British Pound plummeted in early-morning trading following a bearish January CIPS PMI report. The expected reading was at 60.6 and the actual posted a decline to 59.2, sending the cable through the 1.9600 mark. Both employment and new business components slipped while input and output prices moved higher, suggesting that services demand remains relatively robust while underlying inflationary pressures persist. Read More....

Hot Coffee?

Hot Coffee? Coffee futures may be setting up for a bull run in the next few weeks, as traders shift their attention from the strong shipments of the 2006-07 crop from Brazil and Vietnam onto what will be a smaller than average crop from leading producer Brazil in 2007-08. Read More....

Zinc Sinks!

Zinc sinks! Zinc futures traded at the London Metal Exchange fell nearly 10% today, as long liquidation by commodity and hedge funds overwhelmed the market. Zinc was one of the star performers in 2006, with tight supplies and ample demand which caused a run to all-time highs. Read More....

Friday, February 02, 2007

FX Daily Wrap Up

The US Dollar had a bit of a lackluster week, closing near the 1.2970 mark. One of the biggest economic indicators, the monthly payroll report, did little to move the Dollar into new territory and only produced a 50-pip gain. Unemployment numbers hit a 4-month high of 4.6%, which is a slow beginning for a new year. New jobs were expected to come in around 150,000, but weak hiring produced only 111,000 new jobs for January’s payroll. Revisions of prior data from December 2006 confused traders with 405,000 new jobs created for the year. The initial reaction was an increase for the Majors against the US Dollar, but after the notes were thoroughly read, the Dollar bulls pulled the markets back into their proper place. Also in the mix for the Dollar was the University of Michigan’s consumer confidence poll for January and data on factory orders in December. Next week we shall see if the US Dollar can hold-on to it’s gains. XPRESSTRADE Analyst David Hilgeman

Employment in Focus

Bonds – Bonds were unable to sustain early gains as private reports indicate that home sales have improved. Also weighing in on treasuries was a higher PMI Price Index figure, which jumped to an inflationary 53.0 versus estimates of 47.0. March Bonds traded as high as 110-26 before the numbers were released. Read More....

Unemployment Hits 4-month High

Unemployment hits a 4-month high of 4.6%, according to the Labor Department this morning, signaling a sluggish start for the New Year. New jobs were expected to come in around 150,000, but skittish employers created only 111,000 new jobs for January’s payroll. Read More...

Something for everyone in today's NFP report!

Something for everyone in today's NFP report! The devil is in the details in today's monthly Non-farm payrolls report. First off, the headline figure of a gain of 111,000 jobs in January was a bit of a disappointment for traders and analysts who were looking for a figure closer to the 150k level. Read More....

Thursday, February 01, 2007

FX Daily Wrap Up

The US Dollar traded in an extremely tight range today against the Euro due to the anticipation of tomorrow’s key Non-Farm Payroll report. In the early morning sessions, the EUR/USD cross was stable, with range-bound trading hovering in the 1.3030 range when Dollar bulls started a very slow movement to the day’s low of 1.2995. A short-lived mid-day spike hit the high of 1.3055 before dropping back within seconds of reaching that mark. The pair closed out at 1.3018 heading into the Asian session. The Non-Farm Payroll (NFP) report is a good indicator of the employment rate and overall strength of the labor market, as it represents all business employees excluding general government employees, private household employees, and employees of nonprofit organizations. The rest of the workforce accounts for the more than 80% who contribute to GDP. The full report also includes estimates on the average work week and weekly earnings of these employees. The NFP report is a good general indicator of the health of the economy, and is often a sharp indicator and market mover in FOREX trading. Current estimates are that the NFP will decline slightly from last month or possibly stay at the same rate. David Hilgeman, XPRESSTRADE Analyst

Natural Gas Falls

Natural Gas – March Natural Gas dropped over seven cents, giving back most of the gains from Tuesday’s eighty cent rally. With US gas ending inventories sitting at 2,757 billion cubic feet (bcf), there is ample supply and a record inventory for this time of the year. Read More....

The Buck Stops Here

Mixed to lower trading prevailed for the buck after a strong open yesterday. Dollar longs were seen liquidating ahead of the Fed announcement, where interest rates were left at 5.25%. Comments of easing inflation and a statement by Treasury Secretary Paulson concerning the weakness of the Yen sent the Dollar to the downside for the remainder of the session and into tight ranges against the Swiss and Euro overnight. Read More...

Going Hog Wild

Going Hog wild! Lean Hog futures have been in a "bullish" mode of late, with the April contract in a 3-week uptrend since the recent lows were made on January 10th. Yesterday's sharp rally was tied to short covering and fresh commodity fund buying, which spread throughout the entire meat complex. Read More...