May 9th, 2012 by Scotia Plaza Futures

By mid-morning the same pattern is emerging as we’ve seen for the past several weeks. Risk assets are under heavy pressure stemming from political and economic uncertainty in Europe but temporary bases are appearing as short term bargain hunting comes into play. Coincidental with European markets closes, risk assets have typically rallied into the remainder of the trading session only to come under renewed pressure in the subsequent North American overnight markets. Negotiations to form a functioning coalition government in Greece are making little to no progress while 10 year Spanish bond yields have risen above the psychologically significant 6% threshold. With little significant US economic data on tap until tomorrow morning there is still room for optimism, no matter how misplaced, that somehow the sputtering US economy can struggle through the growing global headwinds. June S&P futures are down 12.50 at 1346.00 but the contract has managed to push almost 7 point off its session low. June US bonds, while ahead on the day, are now almost half a point off their session highs as well, confirming the typical pattern of mid-morning risk asset rallies.

 

The June US dollar index is forging ahead and leaving its daily chart gap behind. The contract is up 43 basis points at 80.28 but the overnight high of 80.41 brought the contract directly into contact with technical resistance. Profit-taking should be seen in the short term although the daily chart is on the cusp of confirming an established, longer term uptrend. The June Euro currency is down 92 basis points mid-morning and has finally responded in earnest to its breach of key technical support two sessions ago. All momentum studies are bearish with room in the short term for further declines while moving averages and trading action confirm an established bear market. The current down-leg should see the contract drop to weekly support at 1.2650. June Canadian dollar futures are again under pressure in sympathy with deterioration in risk sentiment. So far the contract has found support at the lower ranges on the daily chart but trend indicators leave the contract vulnerable to additional losses to the 0.9900 level in the short term.

 

Metal futures remain under technical pressure with precious metals also seeing liquidation pressures as they are easy assets to liquidate to meet margin obligations in other market positions. June gold is down $16.70 mid-day at $1587.80. The contract has already slipped through nearest support with weekly support next in line in the $1530 range. July silver is also under pressure again with an earlier session low of $28.61 making a tentative probe of support at $28.40. Momentum studies are strongly bearish.

 

June crude oil futures are down 95 cents at $96.06, almost a dollar off earlier session lows. Inventory data at 10:30 saw a significantly larger build in inventories than expected but competing for market influence was a substantial drawdown in unleaded gas levels. With the June crude contract below a key pivot level on the daily chart for a third consecutive session, additional declines to $93.50 look increasingly probable before oversold readings begin to provide support again.

 

Grain futures are under moderate liquidation pressure ahead of tomorrow’s USDA crop data. July soybeans have declined to daily chart support and bounced by mid-morning. The low of 1413 ¼ sits inline with lows seen throughout much of April. Momentum studies have however slipped into bearish levels. July wheat is down 8 cents at 607 while July corn is down 6 ¾ cents at 616 ¼. Both contracts have been struggling to find support around current levels although wheat prices are seeing heavier technical pressure than corn. Discounts to corn could however encourage feed switches at the cash level.

April 4th, 2012 by Scotia Plaza Futures

Between the minutes of the Federal Reserve squashing hopes of more free money and the reality of the Spanish economy sinking in to traders’ plans, risk assets are under heavy pressure overnight and well into the North American session. Fed officials have been encouraged by recent improvements in US economic data and as such their discussions have shifted toward an eventual exit to quantitative easing rather than an extension of the plan. Today’s ECB decision and accompanying statement on the other hand paints a picture of concern for the Euro zone. Despite some chatter earlier in the week from some members that an exit plan from monetary easing should be formulated, the data out of the Euro zone implies more time is needed for the actions taken so far to take root. In particular it appears clear that European banks have taken the ECB’s money and plugged holes in their balance sheets rather than extending it to corporate loans as was the intention. Additionally with Spain reporting its debt to GDP ratio as approaching 80%, reality is finally creeping into the debt market with Spanish yields rising sharply and debt placement coming in at underwhelming levels. Unfortunately a Spanish default is inevitable. It is not a question of if but of when.

 

The US dollar index has jumped sharply in response to the Fed minutes as the perceived end to quantitative easing is by proxy being played as an anticipated rate increase. The index held support over the previous few sessions in the 78.80 area and while a one and a half session rally does not constitute a trend change, momentum studies have jumped into bullish territory and support has undergone a strengthening. Short term resistance sits at 80.20 and the contract is likely to undergo a consolidation in the short term as real rate moves are still more than a year away. The June Euro currency was unable to break through resistance at 1.3400 and the ECB’s dovish monetary policy outlook has led to abrupt long liquidations. Momentum studies have turned sharply lower with first support already breached. Option barriers and prior lows put the next support level at 1.3070. The June Canadian dollar is under pressure in response to deterioration in risk sentiment. The longer term outlook remains for range-bound trading as the BoC tends to track Fed policy which will be CAD bullish while Euro zone struggles will pressure CAD. Today the June contract is off 39 basis points at 1.0024 with a neutral technical path. Repeated contact with an overhead trendline leaves the contract vulnerable to a probe lower of one to one and a half cents.

 

Metal futures are sharply lower in response to bearish technicals and deteriorating risk sentiment. A move away from quantitative easing is also a negative as fixed rate instruments offer competitive alternatives to metals. June gold is down $55.30 at $1616.70 with a preliminary target of $1605 still very much active. Support is reasonably robust at $1592.00. May silver is down $2.00 at $31.26 with support close at hand at $31.15. A close below $31.10 however would likely lead to additional losses of $2.00 per ounce over the short term.

 

Crude oil futures are under pressure with a large build in US inventories adding to selling momentum already in place from poor Euro zone economic performance. May crude is down $2.45 at $101.56 with a bear trend now comparatively well established. The next downside objective is $98.70 while short term resistance is at $104.70.

 

Grain prices are mixed this morning as the markets contend with their own fundamentals and ignore broader global worries. May soybeans are up 3 ½ cents at 1420 ½ while corn and wheat hold within recent ranges. Soybeans are still vulnerable to a correction to the 1390 level while corn and wheat are likely to hold fairly steady for the next two to three weeks.

April 2nd, 2012 by Scotia Plaza Futures

Surprise strength in Chinese manufacturing activity has thrown some support into markets as we begin the new month and fiscal year but risk appetite remains somewhat tempered by weak Euro zone employment figures and lingering rumours that the Bundesbank had chosen not to accept some bonds from weaker Euro zone members as collateral. Though those rumours have been denied it underscores the fragility of the economy in Europe that such a story would even gain traction. The Chinese data eases concerns of a hard landing but the data is nonetheless slightly weaker than what’s been seen historically if seasonal factors are stripped out. In that backdrop the June S&P contract is treading water at 1403.00, down a quarter point. Last week’s corrective decline took the index to its 20 day moving average and while trading levels have climbed in the meantime, momentum studies remain flat. Daily volume levels are also lower than what one would want to see if the strength in the market is to be sustained. Support is at 1380 and while the 1434 level remains a viable target, technical conditions are softening making this a progressively more difficult objective. June US bond futures are posting negligible gains of 4 basis points at 137’28 which shows no particular inclination toward safe haven asset flows.

 

The June US dollar index continues to hold at support levels but momentum studies are pressuring the market to break lower. Moving averages have crossed bearishly effective the 26^th of March and RSI is trending down. Should support at 78.90 fail to hold the next downside objective would be 78.65. The June Euro currency is holding near unchanged levels, as is the Euro zone unemployment rate which came in as expected at a 14 year high of 10.8% while Spanish PMI failed to meet expectations and rather confirmed that the country has slipped into recession once again. That said, the June Euro is holding above trendline resistance and carries with it rising momentum studies. The contract is supported at 1.3260 and will encounter resistance at 1.3400. The June Canadian dollar is down 14 basis points at 0.9996 with a technical outlook that is neutral to slightly bearish. Support sits at 0.9950 and 0.9920 while longer term resistance that’s unlikely to be tested in today’s session is at 1.0100.

 

Metal futures are mixed to slightly weaker overnight with a technical outlook that remains slightly biased to price declines. June gold is down $5.70 at $1666.20 with the contract finding overnight resistance at its 20 day moving average of $1678.00. RSI and MACD remain bearish although both are rising slightly. A close above the 20 day moving average would restore bullish momentum while a close below $1661 would keep the contract under pressure for the next few sessions at least. May silver is down 9 cents at $32.39 with a technical outlook that matches that of gold. A close above the 20 day moving average at $32.71 would restore an upward bias while a close below $32.13 leaves the market under pressure.

 

May crude oil is trading slightly lower overnight as Middle east tensions move away from the front pages and traders grow concerned about slowing demand in Europe. The contract is currently trading at $102.45 for a decline of 57 cents. A bear flag is developing on the daily chart while momentum studies are negative. A decline below $102.10 projects additional losses in the short term to the $98.70 level.

 

Grain prices are mixed overnight as traders digest last Friday’s USDA data. May soybeans are up 9 ½ cents at 1412 ½ in a continuation of the bullish pattern on the daily chart. Next resistance is at 1432. May wheat and May corn are holding near unchanged levels in a price chart that implies mostly sideways trade over the near term.

 

March 6th, 2012 by Scotia Plaza Futures

Coming into the North American session news headlines would have one believe that traders are continuing to reflect negatively on yesterday’s announcement that China sees reduced growth expectations and that Greece may or may not complete its bond swap arrangements. While it’s possible that 24 hours later the same news is rumbling through markets, technical considerations are certainly playing a significant role. S&P futures have been long overdue for a correction and the market has traded down to a short term target of 1354.00 as noted yesterday. It is simply uncharacteristic of any market to spend more than fifty consecutive trading sessions above a 20 day moving average without a retracement, which is what we had been seeing. With volume levels low, the market was long overdue for profit-taking. As this builds in urgency, S&P futures are vulnerable to continued downside momentum to the 1338.00 level. US bond futures are otherwise reflecting small safe-haven bids with the contract up half a point. While there is broad selling in risk assets, it is dispersed and orderly suggesting there is little news behind the movement.

 

The US dollar index is up 37 basis points at 79.73, following through on technical improvement that had been building for the previous three sessions. Momentum studies are positive and short term moving averages are on the cusp of crossing up, suggesting the possibility of sustained upward momentum. On the major crosses, only the Yen is gaining versus the US dollar which reflects risk aversion to some extent as this is likely movement based in the “carry trade”. The March Euro currency is down 75 basis points at 1.3151. The contract has closed below its short term moving averages for two consecutive sessions and momentum studies are negative. Key support remains at 1.3080 and should the market close below that level it would likely do so coincidental with a bearish cross in moving averages, suggesting sustained downside and probable new lows for the contract over the following weeks. The Canadian dollar is down 44 basis points at 1.0015 with an overnight low dipping below parity for the first time in a week. Momentum studies are still barely positive and moving averages are still bullishly configured. There is however trendline support at the 0.9945 level. This trendline has not been tested in a little over 6 weeks though this was also the low of trading on the 27^th of February, making this a high probability short term target.

 

Metals are broadly under pressure as the technical outlook weakens further. April gold has retraced to test its short term downside target of $1680, posting an overnight low of $1683.60. Moving averages have now crossed down and momentum studies are trending bearishly. A consolidation can be expected but the next downside objective appears to be $1648. May silver is down 22 cents at $33.47 but has also tested its key support level of $33.00 earlier in the overnight session. While technically in better shape than gold, the chart outlook is deteriorating and a close below $33.30 would be a bearish warning.

 

April crude oil is down 56 cents at $106.17 with consolidative price action on the daily chart. Regardless of European growth concerns, rising tensions with Iran will keep prices supported. A short term maximum downside objective would be $104.00.

 

Grain prices are lower overnight in sympathy with a stronger US dollar and also under long liquidation pressures ahead of Friday’s USDA grain report. May soybeans are down 2 ½ cents at 1322 ½ as high RSI readings have weighed on the chart. A further correction of 10 cents can be expected. May wheat is down 10 cents overnight at 661 ½ while may corn has shed 7 ¼ cents to trade at 653 ½. The chart outlook is bullish for all three of the grains but traders may wait until after Friday’s data to make significant commitments.

March 2nd, 2012 by Scotia Plaza Futures

As a two day summit of EU leaders comes to an end traders are taking a cautious view of events over the past few days and stepping back from risk assets once again. Though not heavily under pressure, the selling is broadly evident in most sectors. Energies, equities, metals and perceived risk currencies are lower overnight as investors fret over whether Greece can assure finance ministers that austerity measures will in fact be enacted. Holders of Credit Default Swaps were also rattled yesterday with the ISDA’s ruling that there would be no payout in the Greek debt crisis. A lack of confidence in protective instruments will do nothing to encourage purchases of risk assets and it will be important going forward that investors in larger bond markets like Italy and Spain feel confident that hedges are credible. As the North American session dawns, March S&P futures are down 6.00 points at 1368.50. RSI and MACD are beginning to turn down while the market is still long overdue for a retracement below at least the 20 day moving average which presently sits at 1353.50.

 

The US dollar index is up sharply this morning, gaining widely on all the crosses. The March contract is up 51 basis points at 79.34 which brings it back above its 10 and 20 day moving averages for the first time in 10 trading sessions. RSI is above its mid-point and MACD is turning up as well. A close above 79.25 would restore a bullish bias to the short term chart outlook. The March Euro currency is down 92 basis points at 1.3223 after failing to follow through on a bull flag formation on the daily chart two days ago. Momentum studies are now trending down and the currency is back below its short term moving averages. Larger technical support is still well below at 1.3080 and while not likely to be challenged today, a close below that level would fully restore a bear market. The March Canadian dollar is down 21 basis points at 1.0121 but is performing comparatively well when viewed in context with the rest of the major crosses. The technical outlook remains bullish but resistance in the 1.0150 range has proven strong. Weakening in risk sentiment could pressure CAD back toward the 1.0050 level in coming sessions but additional downside should be kept in check.

 

Metal futures are under pressure led by continued liquidations of precious metals. April gold is down $9.10 at $1713.10. Momentum studies have crossed into bear ranges and moving averages are on the verge of crossing down as well. Historically the gold chart shows very few instances of single-day selloffs so Wednesday’s $100 range signals additional weakness in coming sessions is still a high probability. First major support would be found at $1675. March silver is down 61 cents at $35.04 with bearish momentum studies but prices are still above short term moving averages. Support sits at $34.50 while resistance would be encountered at $35.80.

 

April crude futures are down 86 cents at $107.98 in general sympathy with deterioration in risk assets. Yesterday afternoon’s sharp rally above $110 per barrel was driven by rumours of a Saudi pipeline explosion. Given that the story broke on Iranian state news and was unconfirmed elsewhere, it’s reasonably safe to say that there was no explosion. The technical outlook is bullish and yesterday’s price spike, while based on unfounded rumours, is still a reminder of the bullish sensitivity of energy markets. Support is at $106.

 

Grain prices are under mild pressure overnight with profit-taking ahead of the weekend the dominant feature. May soybeans are down 4 ¾ cents while wheat and corn shed 2 and 3 cents respectively. Daily trends are generally bullish but the soy market must still contend with overbought readings in the short term.

 

February 28th, 2012 by Scotia Plaza Futures

Traders are looking ahead to tomorrow’s ECB tender as a market-positive event and as such, risk assets are en vogue this morning. Forecasts range from a take-up of 200 to 750 billion Euros in tomorrow’s operation with the majority of analysts on the high end of that range. While this is expected to boost liquidity, improve balance sheets and increase lending activity it is still a sign that European banks are not capable of standing on their own and are otherwise still shut out of interbank lending markets. That said, March S&P futures are up 5.25 at 1372.50, posting another new high overnight. The rally continues to run without technical support from momentum studies but this only warns that an eventual selloff will be more aggressive rather than providing a particular time frame. The contract has not dropped below its 20 day moving average since December 20th of last year, yet another sign that the rally is pushing its duration to an extreme. March US bond futures are otherwise down 7 basis points at 143’24 in negligible confirmation of the equity market rally. The technical outlook is shifting to a bullish bias which also adds pressure to the risk asset rally.

Metal futures are stronger overnight, continuing a technical rally with support coming in as well from the general improvement in risk appetite. April gold is up $7.20 at $1782.10 with no immediate warning signs on the daily chart. RSI and MACD have been rising with prices and moving averages are trending well. Next resistance would be found near the November highs of $1808 while support should be developing in the $1740 range. March silver is up 43 cents overnight at $35.95 with the contract trading at its highest level since prices collapsed last September. Momentum studies are confirming the rally although RSI is approaching overbought readings. Traders are reminded that the March contract reaches its first notice day tomorrow. March copper prices are also firmer overnight, following the uptrend in equity futures. At 3.9210 the contract is up just over 4 cents with rising momentum studies behind the rally. Here too the contract will move to first notice day tomorrow so speculative long positions should be liquidated by close of business today.

April crude oil futures are down 10 cents overnight at $108.46 as the market retraces from highs in the $110 range. RSI reached overbought levels coincidental with the high. Despite supply fears brought through tensions with Iran, traders are becoming increasingly concerned that the run-up in prices will dampen economic growth in already fragile economies. Technically the 10 day moving average at $106.00 represents the nearest retracement level while upside targets on the weekly chart point to $111.50.

Grain prices are firmer overnight with technicals providing support. May soybeans are up 8 cents at 1310 ½. This pushes prices to new five month highs but also moves RSI to 78 which is at the threshold over overbought levels. Additional resistance is also expected at the 1313 level. May corn is up 2 ¼ cents at 650 3/4 , following up on yesterday’s breakout through trendline resistance. While price resistance may be encountered at 656 there appears to be a solid technical basis for a prolonged rally at least to the 680 level. May wheat is up 6 ¼ cents at 659 but still has trendline resistance immediately overhead. A rally through 664 would confirm upward momentum and likely lead to additional short term gains to the 700 level.

February 14th, 2012 by Scotia Plaza Futures

Risk assets are fading back as Euro zone finance ministers have opted to literally phone-in tomorrow’s debt meeting. Greek officials have apparently not fully prepared an explanation of a further 325 billion Euro in proposed spending cuts which leaves the ministers in yet another wait and see mode. The ongoing saga has traders moving to the perceived relative safety of the US dollar and US treasuries. March S&P futures are down 6.75 at 1342.25 while March US bonds are up over a full point at 143’13. The US dollar index meanwhile is up 52 basis points at 79.57 but is finding resistance in the 79.60 area. A close at present levels would restore a bullish bias to the daily chart.

Precious metals, which have been trading along side risk assets and the Euro currency itself, are trading near to session lows in response to renewed Euro worries. April gold futures are down $7.20 at $1717.70 while March silver is 27 cents lower at $33.45. Crude oil futures have also moved into negative territory with the March contract down 10 cents at $100.81. Though middle east tensions persist with ongoing Iranian sabre rattling, traders are more immediately concerned with the possibility that deeper Euro problems will lead to protracted declines in oil demand.

February 6th, 2012 by Scotia Plaza Futures

Delays and doubts over Greek debt discussions are putting selling pressure back on risk assets this morning. Comments over the weekend implied that Geek politicians have until noon today to reach an agreement on deep austerity measures but that deadline does not appear entirely accurate as there are indications things may drag on until the next euro zone finance ministers meeting. March S&P futures are down slightly in response, losing 3.25 points and trading at 1335.75. Friday’s rally tested resistance on the daily chart and volume levels remained surprisingly low given the point level gains. While moving averages imply a well established trend, momentum readings continue to non-confirm. Combined with low volume the market looks ripe for a correction. March bond futures are up half a point at 142’28 in a defensive move with the technical outlook having shifted slightly to the bear side over the short term.

The US dollar index is up 39 basis points at 79.45 as traders seek some measure of safety from European turmoil. Technically the index has bounced from support after six consecutive days of lows in the 78.90 area. RSI and MACD have turned up though the continue to read at bear territory levels. Resistance sits at 76.66 and 79.80 so short term gains could face a difficult start. March euro currency futures are down 84 basis points at 1.3070 with resistance well established in the 1.3230 area. MACD and RSI have turned down and are on the verge of crossing back into bear territory. A close below 1.3025 would likely bring an end to the recent rally. March Canadian dollar futures are down 37 basis points at 1.0020. The technical outlook remains bullish but there is heavy resistance between 1.0050 and 1.0100. Daily volume levels are declining which suggest the path of least resistance for the next session or two could be slightly lower. Support sits at 0.9940.

Metal futures are under pressure in response to general risk aversion. April gold is down $20.40 at $1719.90. Overnight action saw the market move to support on the daily chart with a low posted at $1716.30. Momentum readings have turned down but all trend studies continue to read at bullish levels. Next support is at $1707. March silver is following gold lower with the contract dropping 24 cents to trade at $33.50. The action so far this morning has kept prices confined to an inside day with support still intact at $33.00. Momentum studies are down which could push prices through support to the 20 day moving average at $32.30. March copper is down 4.60 cents at $3.8555, giving back roughly half of Friday’s gains. Trend indicators remain bullish although momentum studies are non-confirming. Strong support is still at $3.7600.

March crude is down $1.02 at $96.82 in part due to concerns of slowing European demand and in part due to the technical outlook. With last week’s breach of the $97.45 pivot there should be follow-though selling pressure which should push things to the $93.00 level over the short term.

Grain prices are slightly firmer overnight with technical momentum still favouring short term gains. March soybeans are up 5 ¼ cents at 1237 ¾. Overnight trading saw a test of initial resistance at 1248. March wheat is otherwise up ¼ of a cent at 661 while corn gains ¾ of a cent to sit at 645 ¼. Trend indications remain bullish with corn prices looking set for additional gains of 15 to 20 cents while wheat looks poised to retest last week’s high. Thursday will see the release of USDA crop data which will aid with short term direction.

January 23rd, 2012 by Scotia Plaza Futures

Risk assets are on the move this morning despite inconclusive Greek debt discussions. Finance ministers will meet again later in the week in a last ditch effort to push the EU and IMF into a greater role as private sector creditors are said to have reached the limits of acceptable losses in current talks. Traders have since taken comfort from a well received German 12 month t-bill auction which placed a little over 2.5 billion Euros despite comparatively low yields. Equity futures are still somewhat tentative with March S&P up 1.75 points at 1312.50. Technically the market remains bullish but RSI is nearing overbought levels and MACD continues to non-confirm since the 1265 level. Next resistance would be found at 1320. March bond futures are down half a point to 141’13 in confirmation of a risk asset rally. Momentum is bearish with room on the daily chart for a decline to major support at 140.

The US dollar index has dropped into its support zone with momentum turning bearish. At 79.98 the index is down 42 basis points with losses spread out broadly on the crosses. A break below 79.90 could see additional losses accumulate to the next support point at 79.00. March Euro currency futures are advancing 88 basis points and crossing the 1.3000 level for the first time sine January 4th to trade at 1.3012. Momentum has turned bullish and while there is no confirmed uptrend, continued short-covering could lift the contract to trendline resistance at 1.3135. March Canadian dollar futures are up 48 basis points at 0.9898 and is nearing a test of resistance levels at 0.9920. The trend outlook is bullish and momentum readings suggest that this time the dollar should be able to sustain its advance. Anticipate a rally to next resistance at 1.0050 in coming days.

Metal futures are higher overnight, spurred on by improving risk sentiment and supportive technicals. February gold is up $10.20 at $1674.20. This is the first foray into the 1670’s since mid-December. The market is due to encounter trendline resistance at $1678 and $1688, making a difficult environment for this new bull. March silver is up another 69 cents at $32.37 with the contract well below overnight highs of $32.77. The market is now in a bullish trend but resistance sits nearby at $33.00. Support is developing at $30.70. March copper is up 4.3 cents at $3.7880 and is holding within recent ranges. Having advanced 40 cents in the past two weeks, a consolidation is likely before testing next resistance at $3.9200.

March crude oil is up 80 cents at $99.13 with geopolitical events still supportive while technicals deteriorate. Short term moving averages have crossed down with today’s session while RSI and MACD read bearishly. Overnight trade saw the market test and bounce from the bear pivot level at $97.45 where a close below this point should lead to short term losses of an additional two to three dollars per barrel.

Grain prices are firmer overnight with technical outlooks still largely bearish and prices moving into optimal risk/reward levels for short positions. March corn is up 6 cents at 617 ½. Overnight highs tested the 20 day moving average while RSI and MACD remain in bearish levels. Shorts at current levels should be protected with 632 buy-stop orders. March wheat futures are up 6 ¼ cents to 616 3/4, also testing the 20 day moving average overnight. Momentum studies remain bearish with short positions also best protected at the 632 level. March soybeans are otherwise up 14 ¾ cents at 1201 ¾. Momentum is turning up and the market is testing resistance. Short positions can risk to 1232.

January 13th, 2012 by Scotia Plaza Futures

Futures markets are mixed heading into the North American session with equity markets still feeling the weight of yesterday’s disappointing US jobs figures and currency markets now contending with a less than spectacular Italian debt auction. While yesterday’s Spanish bond auction virtually doubled its intended size, today’s Italian auction was fully subscribed but yields were mixed with longer dated 2018 issuances rising versus prior auctions. As a result, traders were beginning to question whether the recent string of positive economic releases has perhaps run its course. March S&P futures are down 2 points at 1289.75 with a bullish technical outlook still intact on the daily chart. March US bond futures meanwhile are reflecting early concerns with the contract rallying 17 basis points to 144’03. This brings momentum back into positive territory and suggests that capital is still readily flowing into defensive positions.

Currency futures are relatively quiet as enthusiasm over the euro currency falters. The March US dollar index is up 11 basis points at 81.15 with the contract holding support overnight at its 20 day moving average. Momentum studies remain bullish and divergent factors on the daily chart have been addressed with the retracement of the last few days. Trendline support is still well below at 80.30. March Euro currency futures are down 42 basis points at 1.2793. A rally from low RSI levels has been overdue with the contract liable to test its 20 day moving average over the short term barring any new disastrous fundamental interventions. Retracement into the 1.2950 area still cannot be ruled out but should be seen as a selling opportunity in that event. March Canadian dollar futures are trading quietly overnight with the contract currently up 4 basis points at 0.9805. Wednesday and Thursday’s sessions were virtually identical while today’s session is a small inside-day on the chart. A small wedge has been developing which puts resistance at 0.9730 and support at 0.9760 for today’s session.

Metal futures are slightly weaker this morning in a correction to risk asset pricing. February gold is down $4.20 at $1643.70. Technical momentum indicators are turning positive but longer term moving averages are still configured bearishly. A close below $1630 on a weekly basis would be a negative development for momentum. March silver has slipped back below the $30 level with the contract currently sitting at $29.88 for a loss of 24 cents. Technical momentum is neutral with support at $28.80 and resistance at $30.40.

February crude oil is flat heading into the North American trading session at $99.10. The market sold off late yesterday on news that new US sanctions on Iran may still take several months to implement. Preliminary support was broken with momentum studies turning bearish. Next support sits at $97.95 with a breach of that level suggesting a long term top in place just over $103.

Grain prices are mixed overnight after yesterday’s bearish USDA data lead to sharp losses. March soybeans are up 3 ¾ cents at 1186 ¼. Overnight highs tested the 20 day moving average and while the chart is now technically bearish, buying interest has been strong since yesterday’s open. March wheat is up 4 cents at 609 in a negligible bounce from yesterday’s losses. Technical momentum is bearish with resistance in the 620 area. March corn is steady at 611 ½ after yesterday’s limit-down losses. Momentum here is bearish as well with resistance also likely in the 620 range.