At 3:30pm GMT the futures markets were mostly up today. If we exclude the stock markets and crude oil pretty much flat or slightly down, most commodities futures are up including futures on foreign currencies. As it turns out today the USD is weakening significantly. Earlier at 1:30pm EST the number published for the CPI was 0.5% for June, slightly higher than the 0.3% expected and the core CPI was 0.2% as expected. The Industrial production was also in line and up 0.3% for June, the capacity utilization was 77.8% also pretty much the estimated number.
All 5 futures on metals are up – not very strongly yet but pretty much all of them at their intraday high and helped by the USD weakening. Gold futures trade around $1,293.80 up 0.80% so far, Silver futures are just at $20 and up 0.76%, Platinum futures are up by 0.84% at $1,433.30, Copper futures lead with a variation of 1.34% at $3.1860 while the Palladium futures are up 0.55% at $736.20. As we have been saying over the sessions we believe metals are due for a recovery in the coming sessions with the immediate objective for Gold to grab the level of $1,300 an ounce and try to attack the next two resistance levels at $1,350 and $1,400.
Bonds futures are slightly up as a depressed USD is keeping the USD yield curve from going up. The advances are quite meager however with the T-bond futures up 0.37% at 135.09 while the 10Y T-note futures are up 0.15% at 16.69. We believe that bonds futures may gain by a potential correction of the stock markets over the short term, however fundamentals point towards higher yields by the end of 2013 and therefore lower bonds prices still.
Crude oil futures slightly down and around $106 a barrel after going back above $107 and then declining again to $106. The huge rally observed in the recent weeks seems to be losing some strength but as signaled before we would be reluctant to put on a short position before the trend has reversed more clearly.
Chart of the Day
The chart of the day is a daily frequency chart of the S&P500 futures. We want to show that we believe the decline started in mid-May is not over and the recovery rally observed since the bottom at the end of June might be losing strength. We will observe attentively and put a short if a bearish pattern was to materialize on the contract.