Hit the Mark Trading’s Brief Review of Overnight Market Action Setting the Tone for the Trading Day
We have a quiet morning in markets after yesterday’s FOMC statement. Today is the "reaction to the action" and traders are bidding up US equity index futures. The FED keeps the market happy.
Across the pond the vote for Scottish independence is underway. A "No" vote could boost markets simply because markets express relief from uncertainty. Action in the British Pound tells us at this point in time currency traders believe a "No" vote is forth-coming.
The knee-jerk response from yesterday’s FED statement, where interest rates remain unchanged…but future course is set for higher rates, lifted the US dollar. QE wind-up is on schedule boosting US dollar. Euro fell. Recall we cashed out of September Euro futures whilst initiating a new position in December futures. The new position yesterday was up $1k…nice. Profit now is around $450.00. We will keep our protective stop unchanged.
I think the Euro could strengthen on a Scottish "No" vote. This is just an opinion. The Scottish vote carries "event" risk. While we do expect lower Euro long term, there is no shame in taking profits waiting for the dust to settle on the currency front.
Meanwhile, ECB’s "Targeted Long-Term Refinancing Operations," (TLTRO) allow banks to access cheap credit. So far, banks are not interested having taken up less than expected ECB loans. Back to the drawing board for Draghi.We expect deflation shall remain as an under tow.
This morning’s USA initial jobless claims much better than expected and below consensus range.Excellent.
This morning’s USA housing starts and permits were lower than consensus, but higher than consensus range, which is good although the press might report the number as disappointing.
Today is official roll-over day for US equity index futures. Most have rolled. Friday is Quadruple Witching.
ICE announces trading the London softs commodity futures will transition to the ICE trading platform on September 29. Understand what you trade and investigate thoroughly.
Allendale reports ideal weather for soybean harvesting in the 6 to 10 day and 18 to 14 day outlook.
Today’s Reports and FED Activity
8:30 Housing Starts
8:30 Initial Jobless Claims
10:00 Philly Fed Business Outlook
10:30 EIA Natural Gas Inventory
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
- Equity index futures are higher following the established game plan of working off the FOMC policy statement designed to keep markets supported.
- Energy is quiet…incrementally higher in crude and natural gas.
- All the metals lower. Copper gives back most all Tuesday’s surprise shock move. Snake pit.
- Grains are quiet as church mice.
- Cocoa pull-back continues.
- Coffee consolidates in tight range.
- Sugar traders monitor March with your October trading.
- 30-year bonds find support on the USA housing report.
- US dollar incrementally lower. Euro incrementally higher.
Think About This!
US stock traders are eagerly awaiting Alibaba. Let this pass. The more emotions get caught up in this stock, the more volatile IPO day.
Have a great trading day!
To learn more from Martin, visit HitTheMarkTrading.com to join his mailing list and receive blog updates.