- Silver has had back to back monthly gains for the first time in at least 2 years.Silver was 4.5% higher this month.
- Platinum was higher by 7.4% for the month
- Crude Oil higher by .75% for the month. haven’t had back to back monthly gains in Crude since April and May last year.
- Rbob down 4.8% for the month,and has closed lower for 7 out 8 months.
- Copper +2.94%(lme) for the month. The best monthly gain in almost a year(3-15)
- Aluminum had the 3rd consecutive monthly gain,it closed higher by 3.55%
What we can take form this is that metals look to have found a bottom and may be trying to take part of a reflation trade.Precious metals going bid because of the negative rates syndrome worldwide,Gold cant go below Zero.
lets see if it materializes. Buying expected to show up in the bonds and selling in Stocks at the pit close of each asset class..
After some excitement earlier this morning on the surprise 50 Bps. cut In China reserve requirement,markets showing very little incentive to trade.Month end adjustments hopefully will add some volatility when respective markets do close.Euro is heavy , Eur/jpy -200 pips usually not good for Risk on trades, but Stocks still hold gains here in the US.I am hoping for a pick up in action as the European and London Closes will be upon us. Spooz have found support on Fridays pit low of 1942.30 ish but only have 6 point range since 8:30 cash open.Pit range in the 30 years is a somewhat respectable 20 ticks.
Chicago PMI was released this morning and did miss expectations by a healthy 2 standard deviations.This number has lost its significance and markets pay little attention to it.All eyes turning to the ISM and payrolls release later this week.
Oil, Both Brent and wti are bid.The relative strength favors Brent as the Spread between the two products continues to trade further into negative territory. A cut In OPEC production and an Increase in Cushing supplies enough to explain the move.
I believe we see a post Europe close bounce in Spooz
Gold up greater than 10% for the Month
News outlets will take CFTC data and report it in different ways.For example Futures only, Futures and options,managed money and hedge Fund categories.Sometimes it is hard to get a true feel of What Speculators have on. But not this week . For both Brent and WTI we can say that Everyone and their brother is getting Long.WTI looks like net 44k new longs Put on,Reuters reporting That Brent net longs increased by 35k last week and Stand the most bullish since 2011.. Gasoil went from Net short to net long.I will play Contrarian Investor here and Say boat tilting too much in one direction,A correction is coming.
Gold longs near a 1 year high,Silver continued to add net longs.
A couple of items of note.:
Pipeline from Iraq to Turkey has been sabotaged,happens quite often and was expected to be down for a few days.This has changed as talk now that it could be down a minimum of 2 weeks. This pipeline which runs from the Kurdish region of Iraq to Turkish port of Ceyhan carries 600k barrels of Oil a day.the oil terminal at the port will likely be out of Oil this weekend.This Is a Big Deal!!
Not such a big deal A pipeline that carries oil in Nigeria was sabotaged and transportation of 200k barrels a day will be affected.
Outside of OPEC rhetoric this is actually evidence of less oil in the market.
This is one of the markets and feds favorite predictor of Inflation in 10 years. Hard to believe in accuracy of such a metric,but anywho markets look to this as a guide post.It has had a steady move higher as PPI,CPI and now PCE have all shown inflation may be stabilizing and possibly moving higher.At a minimum inflation expectations moving higher not lower.
here is same metric but for Europe, lower trend has not stopped,yet.
Dollar continues to trade higher,3 week high vs euro,1 week high vs. Yen.Multi year high vs. pound,but that is due to Brexit fears. Gold did break out to upside of a technical pattern and if we continue to trade lower,below 1217 we may trigger some stops from late to party Longs.Higher rate expectations=higher dollar
Here is the Core PCE Y/Y which registered the highest % change since November 2012.It now stands at 1.7%, Oh so close to feds 2% target. Inflation worries are back,DOW,NDX, and Spx moving down to lows.
Stocks higher as the Risk on theme from overnight holds steady.A surprise higher revision of Q4 GDP is latest good news to help stocks.Oil is higher as it trades above 50d moving Average for first time since November.Talk of Iran /Russian meeting to discuss Production freeze,Another drop in rig Counts and strong Move higher in products all benefit oil.Oh and Risk on trade also helps.
Whether it is good or bad news,after GDP release rate hike expectations moved higher.For now it is a good thing as it shows US economy with strength,eventually it will weigh on Stocks as another rate hike could be upon us.
Another round of Numbers at 9:00 but these are second tier in nature and shouldn’t matter. What will matter is fluctuation s in oil.
We have seen at least 10 refiners cut back on production due to low margins.Yesterday we saw first draw down in gasoline stocks since November.Today the front month crack spread(how much refiners make turning oil into gasoline) touch highest levels since late August.Mission accomplished as profits moving higher for the refinery business.gasoline has moved front and center as the driving force behind oil price,for now..