Safe haven flows to Swiss franc, euro marches above 1.36

At least 15 Republicans, including Representatives Charlie Dent of Pennsylvania and Peter King of New York, are pressing Boehner to call a vote on a Senate-passed spending bill free of Obamacare-related measures. Data today showed the Institute for Supply Management’s U.S. non-manufacturing index fell to 54.4 in September from 58.6 the prior month. A separate report from the Labor Department showed fewer Americans than forecast filed applications for unemployment benefits last week. The Labor Department will not release its monthly unemployment report tomorrow as scheduled because of the shutdown.

Equities: The DEC13 E-mini S&P 500 (CME:ESZ13) is down 10.50 points to 1672.75, on concerns the government shutdown might not only negatively impact the economy, but also potentially hamper a resolution on the debt ceiling limit. We still have our first downside target of 1664 for this market, with 1678 being a key resistance level. The markets look to be more and more concerned about the impact this political standstill will have on the economy. We believe the S&P 500 will continue to slide to at least our first target.

Bonds: The DEC13 U.S. 30-year bond market (CBOT:ZBZ13) is up 10 ticks to 133’20, and it is staying above our key level 133’16 level. We believe, as we have said recently, that bonds may continue to rally on “safe-haven” flows as investors get more and more concerned with the US government shutdown, and also the mid-month debt ceiling deadline. Our next targets are 134’21 and then 134’28.

Commodities: Both DEC13 gold (COMEX:GCZ13) and NOV13 WTI crude oil (NYMEX:CLX13) are somewhat subdued today. Oil is at interesting levels here, we do believe the gains may slow down if this market reaches the $105 level. DEC13 wheat futures (CBOT:WZ13) continue their recent orderly march higher, trading up $.03 to $6.89. $6.95 and $6.98 look to be good resistance levels for wheat futures. DEC cocoa futures (NYBOT:CCZ13) are down $35 today, after a nice rally from the $2400′s to almost $2700.

Currencies: The DEC13 USD Index (NYBOT:DXZ13) is down 10 ticks to 79.88, and we would not be surprised to see a big down day for the USD coming up in the near future. Conversely, the DEC13 Euro futures are up again today, this morning up 36 ticks to 136.20. Again, we mark 1.37-1.3710 as our next key target. We would not be surprised to see the Euro head higher than that as well. The DEC13 Swiss Franc is a currency we have been watching, as it has exhibited a lot of strength recently, and is now trading steadily above the 1.11 level.  111.80-90 is our next target area for the Swissie, as US government uncertainty may cause investors to seek more safe havens, as which the Swissie typically is known.

About the Author
Anthony Lazzara

Anthony Lazzara, CEO of Newport Beach, Calif., commodities investment firm Lido Isle Advisors, spent 10 years as a trader and floor broker at the Chicago Board of Trade and Chicago Mercantile Exchange. Anthony has significant experience in the energy, fixed income, and equity futures markets. After being a long-time independent futures trader, Anthony saw a tremendous opportunity to educate investors on how to invest in professional traders. Anthony is now focused on his duty as CEO of Lido Isle Advisors.

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