There’s been a lot of interesting trading action in today’s US session. Major US indices
like the S&P and Dow approached their all-time highs but failed to break through again. Still, indices generally advancing through the day sends positive momentum toward today’s Asia Pacific trading.
Even with the renewed interest in stocks today, commodity price action stole the show in some ways. Concerns over global demand prospects have weighed on resource markets for the better part of a year now, but today, a number of markets started to show signs of life. With USD coming off, some of the pressure on commodities has started to ease, enabling wheat to post a 6.5% gain on the day while oats rallied for 4.2%, lumber gained 3.6% and natural gas advanced 2.2% on a smaller than expected inventory build.
Precious metals also continued to attract strong interest. Gold broke out of a head and shoulders base through $1,220. Silver rallied for a second straight day building on yesterday’s breakout while Platinum joined the party, breaking out of a downtrend.
One commodity market that did not participate in today’s gains was the one that has been leading the recovery in recent weeks; crude oil. WTI tried to climb back above $60.00 but faltered and dropped back again. With the IEA indicating OPEC production has gone up more than US production has gone down and Saudi Arabia claiming they are winning the price way by taking market share back from the Americans, it’s hard to see how the price could advance much further without causing supply to increase once again. Although oil could trade in a wide range for some time, the market share war doesn’t appear to be ending, rather it may be just getting started.
Action in resource currencies was also mixed today. ZAR had a strong day capitalizing on the precious metal rally but AUD and NZD slid back despite gains made by metals and grains. NOK and CAD went in opposite directions with NOK shrugging off the oil retreat that dragged on CAD and especially on RUB.
Heading into the weekend, it’s looking to be another quiet day for scheduled news but with so many markets in transition we could still see significant trading action.
Symantec $0.43 vs street $0.44
Applied Materials $0.29 vs street $0.28
Nordstrom $0.66 vs street $0.71
Significant announcements released overnight include:
US jobless claims 271K vs street 273K
US producer prices (1.3%) vs street (0.8%)
US producer prices ex food and energy 0.8% vs street 0.1%
US natural gas 111 BCF street 116 BCF
Upcoming significant announcements include:
9:50 am AEST Japan producer prices street (2.1%)
3:00 pm AEST Japan consumer confidence street 41.8
3:00 pm AEST Singapore retail sales street 3.3%
8:30 am EDT US Empire manufacturing street 5.00
9:15 am EDT US industrial production street 0.0%
9:15 am EDT US manufacturing production street 0.2%
10:00 am EDT US consumer sentiment street 95.9
10:00 am EDT US UofM expectations previous 88.8
10:00 am EDT US UofM 1yr inflation estimate previous 2.6%
1:00 pm EDT US Baker Hughes drill rig count previous 894