A Labor Department report showed payrolls rose 175,000 last month after a revised 149,000 increase in April, and the jobless rate climbed from a four-year low.
Equities: The JUN13 E-mini S&P 500 has rocketed back up from below 1600 to 1637.25, up 15 points from yesterday’s close. Our two key levels continue to be 1630 and 1653. Now the market is above 1630, and could approach 1653. We believe the market may have established a short term range of 1597 and 1685. Buyers did indeed come out very strong when the market dipped to levels below 1600, showing us that the sentiment regarding equities is still very bullish. We believe if this market dips below 1620, it will be short-lived.
Bonds: The bond market and eurodollar futures are down today, with the JUN U.S. 10-year note trading down 15.5 points, and the MAR16 Eurodollar futures trading down 6.5 points. We repeat our key target for the MAR16 Eurodollar futures is at 9842. With a strong jobs number, we believe this target will be approached soon.
Currencies: The currencies had a wild day yesterday, with the major non-U.S. currencies rallying hard against the U.S. dollar. Today it is a different story, with the Aussie down 1.45% and the Euro down .31%. The Yen has been extraordinarily volatile as of late, dropping almost 200 ticks from yesterday’s high. The Yen could fall farther, possibly to a key support level right below 101.
Commodities: Crude oil continues its consistent strength in today’s session, trading up $0.91 to $95.68. Key grain markets, such as corn, wheat and soybeans, are all down slightly. We focus on gold. We believe gold will approach 2013 lows, and possibly break below $1,300. Our key targets are first $1,340, and then $1,290. Gold is down $32 today to $1,383.
Click to enlarge.