E Markets: Bad News Bears

Commodities: Oil down, Gold up, Copper off 0.7% to $2.6750

  • Oil: $51.01 off 1.1%.Range $50.43-$52.11 with focus on equities/china trade and Saudi comments. $50-$52 key. Brent off 1% to $59.88 with $60 break reopening $57.50 risks. 
  • Gold: $1296 up 0.5%.Range $1287.70-$1296.60 with $1300 and $1305 in play as equities/USD return as drivers of fear. Silver off 0.1% to $15.65 but Palladium up 0.6% to $1287.10 while Platinum off 1% to $809.60. 

Conclusions: Can the Fed hike rates in 2019? The market wants to believe in good news and not bad. The lack of big stories early in the week make the focus abroad that much more difficult to handle and the correlation of US to the rest of the world growth rates that much more in play. 2019 is about convergence not US divergence. The return of better equities led to better growth hopes in the US and eventually that feeds into the FOMC policy reaction function. The discounting of FOMC rate hikes in 2019 isn’t a sign of confidence for the overall market. 

Economic Calendar:

  • 1100 am US Dec NY Fed CPI expectations 2.97%p 2.9%e
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