The pound rallied after the Bank of England said arguments favoring a rate increase are growing. Minutes from the Fed’s April meeting are due at 2 p.m. today. Tiffany & Co. jumped 9.2 percent. The yen (CME:J6M14) reached a three-month high earlier in the morning as the Bank of Japan did not add more stimulus.
Currencies: The currencies have been picking up volatility as of late. Today, the British Pound (CME:B6M14) is up 30 ticks to 168.66, while the JUN14 Euro is down 40 ticks to 136.56. We believe the Euro can head lower from here, and possibly touch 1.35 soon. The Yen had some interesting movement, trading higher on the “no new stimulus” news from the BOJ, but then heading into negative territory later in the morning. The Yen did break a key level of 99 today.
Commodities: WTI crude (NYMEX:CLM14) oil is up $.65 to $102.98. Overall, we believe crude oil has underlying strength and we would not be surprised to see crude oil finish the year much higher. Gold (COMEX:GCM14) is down $5 to $1289. The volatility of gold has been relatively low this year. Coffee (NYBOT:KCN14) is down to $1.81 today, and we don’t detect any key reversal signals just yet. Soybeans are up $.19 to $14.88. Overall, we believe soybeans could head higher from here, as any recent dips have been viewed by the market as buying opportunities.
Equities: The E-mini S&P 500 (CME:ESM14) is up 11.5 points to 1879.50. The market is strong today, and is also anticipating the release of the latest FOMC minutes shedding more light as to the potential for the tapering to continue. As we have been noting, the key level in our view is 1867. We believe the market will approach 1900 soon, and possibly rally beyond that level. 1880 is our key line in the sand for today, and the upside price target for the short term is 1894.
Bonds: Bonds are down 18 ticks to 136’23. 138 looks to be a key barrier to the bond market. Furthermore, if the bonds cannot stay above 138, we could see some type of correction lower, especially if stocks keep heading higher. Overall, the Fed’s moves ultimately may bring the bond market lower, especially if they actually start to raise interest rates in 2015.