Markets turn on payroll data that doesn’t live up to hype


The December U.S. Dollar Index (NYBOT:DXZ13) closed at 82.40 on Friday, down 51.6 points or 0.6% as yields declined in the Treasury market. The interest rate plays an important role in dollar investment attraction. A declining yield detracts while an increasing yield, as had been the case early in the week before the employment data, carried the dollar. Other currency gains on Friday against the dollar included the euro, up 57 points to $1.3182, the Swiss franc 82 points to $1.0674, the Japanese yen 111 points to 0.010102, the British pound 41 points to $1.5621, the Canadian dollar 90 points to .9587c, and the Australian dollar 66 points to .9127c. The failure of U.S. President Obama to garner material support for attacking Syrian government positions at the G20 meeting also was disappointing for the dollar. We are on the sidelines for now.


October crude oil (NYMEX:CLV13) closed at $110.53, up $2.16 per barrel tied mostly to the conflict over Syria and the ongoing crisis in Egypt. Fear of curtailment of shipping through the Suez Canal the main feature to recent strength in crude. The proximity of both U.S. and Russian ships in the Mediterranean is also of concern and creating an additional "fear factor premium" for crude. We are on the sidelines.


December copper closed Friday at $3.2575, up 1.36c tied to the weak dollar. Recent weakness in copper was tied to declining demand by China for  raw materials. We are on the sidelines in copper after having been bearish for some time tied to our expectation for a slowing global economic condition.

Precious Metals:

December gold (COMEX:GCZ13) closed Friday at $1,386.50 per ounce, up $13.50 or 1.2% tied to geopolitical concerns as well as the weak dollar. The Federal Reserve’s indication of a "tapering" of its stimulus program also provided recent support for precious metals. We prefer the sidelines. December silver (COMEX:SIZ13), our favorite of the two precious metals for those that "must have" a precious metal in their portfolio closed at $23.875 per ounce, up 62c or 2.7%. Other metals included October platinum gaining $13.60 to close at $1,495.70 per ounce but lost 2.1% for the week. December palladium gained $9.65 or 1.4% to $696.85 per ounce but for the week lost 3.7%. We are on the sidelines for now.

Grains and Oilseeds:

December corn (CBOT:CZ13) closed Friday at $4.68 ¼ per bushel, up 7 1/4c on pre-weekend shortcovering after Thursdays decline to a three week low tied to strong early harvests. Expectations for a large harvest pressured prices. We prefer the sidelines. December wheat (CBOT:WZ13) closed at $6.48 ¼ per bushel, up 8c tied to the strong dollar and shortcovering. We could see further pressure on prices tied to expectations of an improved Canadian wheat crop. Stay out for now. November soybeans (CBOT:SX13) closed at $13.71 per bushel, up 3 1/2c. We like soybeans and have suggested adding to long call positions recently. For now we would hold current positions but not add.

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