Daily markets morning round-up: E-mini S&P, gold, crude & Treasuries

E-mini S&P (June)

Yesterday’s close (Monday, May 21): Settled at 2733, up 20.00

Fundamentals: Major U.S benchmarks are edging higher into the morning and priming for technical breakouts as fundamental developments continue to favor higher prices. On the heels of the U.S and China calling off the trade war, China announced it will lower import duties on automobiles to 15% from 20-25% and on auto parts to 6%. This is not only a token step in the right direction, this is a direct impact to the bottom line; Ford, GM and Tesla are all up about 1%. Adding to the overnight groundwork is a softer tape in the Dollar; this comes on technical momentum from yesterday’s reversal and an upbeat Monthly Report from the largest economy in the Eurozone, Germany.

The U.S economic calendar brings a breather today, but tomorrow is jam-packed with crucial PMI reads from both the U.S and Eurozone as well as inflation data from Britain, U.S Housing Starts and the FOMC Minutes from the meeting earlier in the month. Today, Facebook CEO Zuckerberg will face the EU Parliament to answer questions on the data breech. Additionally, Russia and Japan have pointed to tariffs on their steel and aluminum exports totaling about $1B and have said they could impose the same. Keep these two topics on your radar in what otherwise appears to be a quiet news cycle, remember, it’s the sessions that appear most quiet that sometimes bring the volatility.

Technicals: The S&P achieved the bare minimum we asked of it yesterday; a close above 2729.50-2731. Price action this morning is elevated against yesterday’s high of 2739.25. Last week’s high was 2741.25.

Crude Oil (July)

Yesterday’s close: Settled at 72.35, up 0.98

Fundamentals: After turning higher in the second half of yesterday’s session, Crude has again traded to the highest level since November 2014. The overnight high comes in at 72.78 and price action remains elevated against here as inventory expectations begin to trickle in ahead of API’s private survey later today and the official EIA data tomorrow. Supply concerns remain front and center with reduced output from Venezuela and the potential removal of Iranian supply from the market boosting prices ahead of what could be a seasonally bullish inventory read. An upbeat global environment after the U.S. and China called off the trade war “for now” has aided this path of least resistance. A wild card for bullish support is if the U.S Dollar weakens from here, boosting commodities priced in Dollars.

Technicals: We maintain a Bullish Bias on Crude Oil but must exude caution at these levels and as inventories come into the picture. The bullish reality is though that the ...  Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels. 

Gold (June)

Yesterday’s close: Settled at 1290.9, down 0.4

Fundamentals: After a rough start yesterday morning, Gold quickly stabilized and pulled off a very solid session. The metal had many aspects working for it, the Dollar fell by 0.5% from its high and Treasury prices pared losses through midday to finish the electronic session at highs. The economic calendar is again quiet today but tomorrow will be critical with PMIs, Housing Starts and FOMC Minutes. Today’s trade can easily become a very technical one and this should be favorable for Gold.

Technicals: Price action traded to a new swing low of 1281.2 yesterday but was unable to remain depressed.

Natural Gas (June)

Yesterday’s close: Settled at 2.81, down 0.037

Fundamentals: Weather from the Midwest to the East Coast is expected to become seasonably warm over the next week and expected demand is to remain stable. In turn, this should keep price action stable into midweek and as storage again comes into the picture. We continue to believe the intermediate to long-term risk is to the upside.

Technicals: Price action is clinging to the pivot level and this is an important area to hold in order to remain intermediate term constructive. 

10-year (June)

Yesterday’s close: Settled at 118’27, unchanged

Fundamentals: Price action in the longer end (10’s and 30’s) put in a solid second half of the session yesterday and while the 10-year finished unchanged, the 30-year grinded out a 3-tick gain. The Dollar softened through yesterday’s session and this could have very well supported price action. However, investors are also likely gearing up for the massive supply hitting the market. This begins with the 2-year auctioned at noon CT. On the economic data front, Redbook is due at 7:45 am CT and Richmond Fed data at 9:00. Tomorrow is the big day though with PMIs from both sides of the pond, U.S Housing Starts and FOMC Minutes.

Technicals: We continue to believe that there is value in this area, especially so if price action maintains above the pivot. The tape is slightly lower this morning.