Companies added fewer workers than projected in February according to this morning’s ADP report. The 139,000 increase in employment followed a revised 127,000 gain in January that was weaker than initially reported. Emerging-market stocks rose for a second day while Europe and U.S. equities were little changed. Stocks rebounded yesterday after President Vladimir Putin said there was no immediate need to invade eastern Ukraine.
Bonds: U.S. 30-year bonds(CBOT:USM14) are down 7 ticks to 132’06. The bonds might start to build some downside momentum, especially if we start to see more consistently positive economic data from the jobs, manufacturing, and housing sector in the United States. We would not at all be surprised to see the bonds approach 2013 lows and potentially break them. The real key in our view will be the jobs and inflation data.
Equities: The E-mini S&P(CME:ESM14) is up 1 point to 1872.50, approaching a very key target area according to our technical analysis. We believe the market may hang out around these levels and not make another big push higher until we see the Friday jobs data. Our current key pivot level is 1,870. Our previous key level was 1,851, and the market clearly breached that to the upside. If the market can’t stay above 1,870, it could roll right back down to 1,851. However, if the bulls stay in control, we could see more rallying approaching our next target of 1896. Our next target for the Russell is 1,235; it is currently down 2.7 points to 1,202.90.
Currencies: The two bigger movers this morning are the Canadian dollar (up 0.3%) and the Aussie dollar (up 0.3%). The U.S. Dollar Index (NYBOT:DXH14)is down 3 ticks to 80.16. The Aussie dollar looks to be in a sideways range, however direction could be tilted to the upside. We would not be surprised to see the Aussie find a short term home above the 90 level. The report this morning was not incredibly favorable to the U.S. Dollar Index because the number did not make a big upside splash. However all eyes will be on Friday’s report to see if the job market warmed up as the worst of the winter is potentially behind us.
Commodities: It seems as a lot of key commodities are down slightly today such as crude oil (NYMEX:SCK14), soybeans and coffee. However, live cattle continues its amazing run higher, up almost a full cent today to $1.46625. Could cattle make a run to $1.50? Coffee has sold off after almost breaching the $2 level two days ago. It is now below one of our key levels of $1.87, down to $1.83 today. Gold is at unchanged levels from yesterday, trading at around $1337.50. Gold seems supported today by the jobs report.