As the U.S. Treasury yield curve has flattened over the last year and more particularly since the third quarter of 2017, many have wondered aloud if this development reflected a greater likelihood for a forthcoming recession.

Other commodities coming lower now. Copper (Futures, July) shown below in the daily chart has had some ‘high wave’ sessions (large movements outside the ‘open/close’ body) with small difference between open and close levels. This is indecisive on daily and is not supportive of the bullish advance.

As a follow-up to yesterday's note on gold, I would advise that open interest rose 16% in Comex gold futures yesterday, to a level not seen since late 2011. The bearish technical reverse, combined with volume being 55% above 15-day moving average and with increasing open interest all point to a strong likelihood that "control" is shifting from the bullish contingent to the bearish contingent.

June Gold is the ‘active’ contract. It rallied hard this morning in the 7:00 am (CST), gaining $10 within 20 minutes and extending that slightly further over the next 50 minutes.

The Fed’s major interest at this point is in achieving financial market stability. Economic agents seem to be more concerned than Fed officials about that prospect. If the Fed can find financial market stability in the short run, it will be more confident in achieving its dual mandates in the longer run.

My confidence is growing that we shall have a decent decline in Eurodollars Reds prior to the FOMC report. More generally, the bullish contingency has been reducing positions while the bearish contingent has remained skittish

Treasury and Eurodollar futures are lower in early trade today, following the strongest session since Feb. 25. That late-Feb session, as appears likely for yesterday’s trade, did not mark a renewed bullish trend.

Crude oil pushed above the 100-day moving average for the first time since early November this morning. We hear from Reuters that Venezuela, Mexico, Colombia and Ecuador (RTRS) are getting ready to meet about crude oil prices in Quinto on Friday.

It is unusual when open interest in Eurodollars and Treasury futures declines on the session where the employment report is released. The reason for generally higher open interest results on these sessions may be that all parties involved have a greater confidence in their understanding of current conditions and are thus more willing to enter into new positions.

Today’s Employment report is important. Trade in the last two sessions is consistent with a market that is positioned where it wants to be with expectations somewhat centered toward consensus.