USDA recap

Quarterly stocks and prospective planting  did not produce fireworks we all were expecting. Soybean numbers leaned bearish  but that is what market was expecting,Soybeans struggling to find a bid though. For corn  New crop numbers leaned bullish,for old crop / Inline to bearish.Wheat   Numbers were in line but a range breakout on daily charts is what is driving the action. KC wheat higher,Minneapolis lower.

Dudley comments

Dudley comments moving the dollar and providing short end with a bid as he says

DUDLEY: NO GREAT URGENCY TO CHANGE MON POL RIGHT NOW

DUDLEY: COULD SEE PAUSE IN HIKES WHEN STARTING BAL SHEET RUNOF
DUDLEY: BAL SHEET NORMALIZATION COULD TIGHTEN FINANCIAL CONDS
DUDLEY: SOMETIME BETWEEN NOW,2018 COULD START BAL SHEET RUNOFF
DUDLEY: DON’T WANT TO DISRUPT MARKETS WITH BAL SHEET MOVE
DUDLEY/BBGTV: INFRASTRUCTURE, EDU SPENDING CAN LIFT

Morning 3-31

Month end/Quarter end today. Yesterday German CPI missed expectations and Today EZ CPI Missed as well. Headline y/y 1.5 vs.1.8 f/c. Core y/y .7 vs. .8 f/c. Small miss but with expectations of a higher then consensus number this was a disappointment For Euro bulls and those that were hawkish on ECB policy. Euro is steady today after dropping the last 3.Pretty tight range of ~30 pips in the spot. Dollar also a touch higher but it too stuck in a tight range. Bunds and Schatz rallied Post EZ Cpi release but similar to currencies maintain a narrow range. French CPI was in line w/ consensus and German retail sales were mixed.
NKY closed lower .8% down 1% for Q1, China +.38% today as her Manufacturing PMI was a touch better then consensus. European Stock Indices are steady to lower. For the Quarter both Dax and Stoxx 50 will have gains greater than 5.5%.Watch the 10:00-11:00 time period as volatility could take a bump higher for the European/London Monthly closes. Overnight spoos -5 handles with a 9 handle range. NASDAQ -6 handles. Gold siting unchanged and guess what? Stuck in a narrow $5 range. Markets waiting for quarter end Flows to dictate action.
President trump will meet with China’s president next week and already the salvos have been fired. Yesterday The White house hinted at finding other measures to punish currency manipulators .This morning trump tweeted out ““The meeting next week with China will be a very difficult one in that we can no longer have massive trade deficits and job losses. American companies must be prepared to look at other alternatives. I imagine china will not take this rhetoric lightly. Also EX NSA chief Flynn asked for Immunity in order to testify. More politics to focus on. Annoying. Yesterday Afternoon the Feds Dudley (Yellen spokesman) said Inflation and growth risks shifting to upside. He is being interviewed on Bloomberg TV later today, 8:00 and attention must be paid. June rate hike probabilities 56% vs 53% yesterday.
Oil in a tight range as well. Brent on pace for best weekly gain of the year. Copper trading lower as all strikes that had bullish impact have been resolved. Copper trading lower by 2 handles. Biggest crop report of the year today at 11:00 as quarterly stock and planting intentions for upcoming crop year are reported.
Theme overnight is one of narrow ranges and low volume as a macro catalyst lacking. Order flow regarding Quarter end could be the factor to drive prices.
2 tidbits from Betfair(via mizuho)
• (1): The probability of Trump leaving before the end of the 1st term is above 50% – bit.ly/2oFlfbl
• (2): The probability of Trump leaving in 2017 ❗is close to 25%

Copper

A  few wild swings in Copper( 1 minute chart below)  Early morning Strength was due to Chile reporting Copper production at a 6 Year low due to the 40+ day strike at worlds largest copper mine.Once copper traded above yesterdays highs  the Bulls became a little more interested,that interest was amplified  due to the time of the day,10:00-11:00.A cluster of daily highs,3, were centered around 270.00 and once they was broken stops triggered and the press to upside continued.

copper

late this Morning 2 bearish news items hit the wire.The First  of minor importance was that a strike in Peru had ended.the second and more important  was that The Indonesian Government was planning on lifting a Ban on Copper Exports.This ban has been in place for 3 months as the Government has tried to extract more Taxes from the Worlds second largest copper mine.Government folded,Thus the big selloff in copper. Freeport McMoran owns both of these mines,Stock +4 % today.

late morning update

Oil still trading above $50 as the European session comes to a close.Market most likely to trade sideways until we approach the close and then the game of will it or won’t it settle Above $50 begins.Higher Oil  higher  and stocks weighing on Bonds .Take a look at this graph  of intraday E-mini spoo s.

spoo2

The vertical Line is 10:30   the unofficial Close of Europe.Look at the action in Spoos post 10:30 ,A  steady decline.This is a common  occurrence movement one way or another. This tells me that Europe was driving the action today,and once that action is gone Spoos start to drift or move to her own Beat.A great indication of What was important to markets in the A.M.  and   it sets up some nice volatility  around 10:30 everyday.