The big stories of today’s futures markets are the euro and Swiss franc currencies along with soybean futures. Fundamentally, we identify the following news items that are driving today’s markets: China relief (soft vs. hard landing scenario), above expectations industrial production data in U.S., and the continuing fiscal cliff uncertainty.
After a “buy the rumor, sell the fact” rally preceding the FOMC rate and policy announcement this week, the U.S. stock futures have sold off quite a bit since the policy statement. DEC12 E-mini S&P 500 futures are back below our key pivot level of 1430. Our next key pivot level for this market is 1380. Positive U.S. economic data seems to be continuing to hold this market up, while the fiscal cliff concern seems to be capping any bullish bursts of buying.
Precious metals, a market that seems to captivate and excite everyone, are fairly quiet today, with gold staying below $1,700 and silver trading at almost unchanged levels from yesterday’s close. Interestingly palladium is up almost 1.5%.
One of the biggest movers in the commodities complex is the soybean futures contract. JAN13 soybeans are trading up 18 cents today, hitting $14.97 this morning. This is around $1 above its levels hit to the downside just one month ago. We believe this market could start to consolidate in the low $15s. Our next upside target is $15.80.
The euro futures are up around 54 ticks today, with the DEC12 contract hitting a high of 131.42. This market is at the top of its recent range, and is likely rallying as an effect of US dollar selling from the enhanced QE policies. We focus on the Swiss Franc today. The Swiss Franc has broken above its recent top of the range level of 1.08. This market has been consolidating since November. Our next major resistance level is 1.11. We view the short term for the Swiss Franc as very bullish.
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