E Markets: Bruised

Commodities: Oil lower, gold lower, Copper up 1% to $2.8095. 

  • Oil: $50.64 off 1%.Range $50.35-$51.57 with Brent off 0.95% to $59.58 – breaking $60 in Brent opens $58 test again and watching $50 in WTI again for more pain. 
  • Gold: $1243.50 off 0.1%.Range $1243-$1250 – still a dollar and rate story with ECB light driver today - $1255 key. Silver flat at $14.73. 

Conclusions: Are the CFO’s wrong? The WSJ story that came out yesterday – almost half of all US CFOs believe a recession comes by end of 2019– hangs over markets as growth concerns dominate this year-end. The market reflects these doubts in bonds and commodities first. The drop in the commodity indices stands out from October. The drop reflects doubts about China growth and about the US as well. The stronger USD also plays a role.  

The logical inconsistency is that most analysts see 1) a weaker USD – so that supports commodities; 2) a Fed pause – which helps risk and growth; 3) some modest trade détente. This makes oil and other industrial commodities the key for judging when the mood begins to shift. 

Economic Calendar:

  • 0745 am ECB interest rate decision – no change from 0% and -0.4% policy expected
  • 0830 am ECB Draghi news conference
  • 0830 am US weekly jobless claims 231k p 230k e
  • 0830 am US Nov import prices (m/m) 0.5%p -0.5%e / exports 0.4%p 0.2%e
  • 0830 am Canada Nov ADP employment change -23k p +75k e
  • 0830 am Canada Oct new housing prices (m/m) 0%p 0%e
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