Federal Reserve Chair Janet Yellen said the central bank will likely continue gradually trimming asset purchases this morning.
A Labor Department report showed jobless claims increased by 14,000 to 348,000 in the week ended Feb. 22 from 334,000 in the prior period.
Orders for U.S. durable goods fell less than forecast in January.
Equities: The March E-mini S&P 500(CME:ESH14) is up 3 points to 1845, after sliding in earlier trading to 1832.75. It still seems as though there is a strong bullish force in the market, however the market is below our key pivot level of 1851. The market has clearly been moving in a sideways direction over the past several sessions, and we are very curious as to whether the market can hold above 1851 and possibly head to 1873. We believe the taper message of Yellen may serve has headwinds for another rally, however, in a bull market the market can move higher even on “bad” news.
Bonds: March U.S. 30-year bonds(CBOT:USH14) are up 18 ticks to 134’21. We believe this is ‘safe-haven’ action following Ukraine tensions, as well as due to higher than expected jobless claims. The bonds may be headed to test its recent range of just above 135. Our next market profile target is 135’06. The bonds have defied the bears calling for a big down move due to the taper. The year is young, but the bonds seem to be benefitting from safe-haven flows today.
Currencies: Yen futures(CME:JYH14) are up 42 ticks to 98.02. Later in the day a key Japanese economic number is released. If the data comes out stronger than expected, we could see a significant rally in the yen, possibly breaking the 99 level. The yen also popped higher in overnight trading likely due to safe-haven flows due to the situation in Ukraine. The Canadian dollar future(CME:CDH14) is down 16 ticks to 89.63, approaching recent 2014 lows. Our next target is 88.88. The euro(CME:ECH14) is down 9 ticks to 136.74, in what looks like quiet trading.
Commodities: May soybeans(CBOT:SK14) popped 24¢in early morning trading to $14.21. We believe the $14.50 level is a strong barrier for this contract. April live cattle(CME:LCJ14) is having another very bullish day, up 1.175¢ to $1.45725. The APR/JUN live cattle spread is up to 10.8¢. March cocoa(NYBOT:CCH14) is up $1 to $2910, while May coffee(NYBOT:KCK14) continues its recent strength, up another 1% to $1.7965. Our next target higher for coffee is $1.87. April gold(COMEX:GCJ14) is up $5 to $1,333. We would not be surprised to see gold make a run for $1350, as international events (Ukraine) may prompt more flows into the precious metal.