Market Overview – Morning Express
– Do not miss our Top Things to Watch this Week, our every Sunday
– U.S. CPI data tomorrow is in focus to start the week.
– U.S. 10-year yield broke out above resistance on Thursday, high of 2.748% today. Futures broke down last Tuesday. A pivotal multi-year trend line from 2007 we have been highlighting for weeks. (chart above)
– 2-year and 10-year yield curve bottomed out on Monday and has been steepening since.
– Risk-off lifting long-end of curve as 30-year yields hit highest since May 2018 and prices lowest since December 2018.
– Fed speak in focus today. Atlanta Fed President Bostic and Fed Governor Bowman both at 8:30 am CT. NY Fed President Williams speaks at 11:00 am CT. Chicago Fed President Evans at 11:40 am CT.
– U.S. Treasury auctions $46 billion 3-years today and $34 billion 10-years tomorrow.
– Inflation data from China hotter than expected last night; PPI 8.3% versus 7.9% expected. CPI more contained at 1.5% YoY versus 1.2% and flat MoM versus -0.1% expected.
– Chinese Premiere Li said this morning downward pressure on economy increasing.
– Expectations mount for Russian offensive on eastern Ukraine.
– French President Macron leading, but in tight run-off with populist right-wing Le Pen.
E-mini S&P (June) / NQ (June)
S&P, yesterday’s close: Settled at 4483.50, down 12.75 on Friday and 55.75 on the week
NQ, yesterday’s close: Settled at 14,327.00, down 209.00 on Friday and 536.75 on the week
– Rally attempts through Friday failed and built a near-term head and shoulders in the S&P (chart above)
– Similar ceiling developed in the NQ.
– Third major test into what was rare major four-star support at 4439.50-4447.50, now reduced to three-star.
– NQ closed below rare major four-star resistance; this is now detailed as major three-star resistance.
– Bears in the driver’s seat with continued price action below our Pivot and point of balance, aligning with our momentum indicators, in both the S&P and NQ at … Click here to get our (FULL) daily reports emailed to you!
Crude Oil (May)
Yesterday’s close: Settled at 98.36, up 2.23 on Friday and down 1.01 on the week
– Although EU working on Russian Oil embargo, the offensive from IEA to battle rising energy costs, along with U.S., to release 240 mb over the next six months starting in May, reduced the risk of a further surge according to Bank of America.
– Chinese Premier Li said downward pressure on economy increasing
– One thing we know about China, they are in the long game. Conversely the White House is reaching for near-term relief with SPR release ahead of midterm elections, to sacrifice intermediate-term stability within reserves. China is talking down their economy to weaken commodities in order to hoard more.
– Over the weekend, Nigerian Oil Minister warned of no spare capacity within OPEC+. This is exactly what we have been talking about for months. They just cannot let the world know. Overcompliance for last few months is the canary in the coal mine.
– Remaining cautiously Bullish in Bias due to strong support being tested right here, right now. However, trend line back-test failure must be watched closely and could open the door down to … Click here to get our (FULL) daily reports emailed to you!
Gold (June) / Silver (May)
Gold, yesterday’s close: Settled at 1945.6, up 7.8 on Friday and 21.9 on the week
Silver, yesterday’s close: Settled at 24.823, up 0.088 on Friday and up 0.169 on the week
– Massive move in Gold and Silver to start the week despite Dollar Index holding firm near 100.00 and yields rising to new highs.
– Geopolitics coupled with talks of slowing Chinese economy and anticipation the Fed will halt growth in the U.S. continues to underpin the precious metals as a safe-haven.
– Risk-off bid in precious metals as stocks slide overnight.
– Do not chase into rare major four-star resistance in Gold, detailed below.
– Still, we are increasing our Bullish Bias but not advising to chase. Momentum has shifted back to the bulls while Gold holds above previous major three-star resistance at…. Click here to get our (FULL) daily reports emailed to you!
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