Tuesday March 30, 2010 - 19:03:12 GMT
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Equity Markets Get Boost from Consumer Confidence then Rally Fades
U.S. stock markets
rallied following the release of a better than expected consumer
confidence report but sellers took the opportunity to sell the move.
The prospect of higher interest rates seems to be weighing on equities
at this time. In addition, investors seem reluctant to buy equities
ahead of Fridayâ€™s U.S. Jobs data. The E-mini S&P 500 is still in an
uptrend, but a lower close today could be a sign that traders will
attack the downside into this report.
June Treasury Bonds and
June Treasury Notes continue to trade in a tight range on light volume.
Last week yields in both of these instruments rose substantially as
demand was less than stellar at the bond and note auctions. This week
traders are standing aside because of Fridayâ€™s U.S. Jobs Report.
Traders are reluctant to take a sizeable position ahead of this
important report. Oversold conditions could trigger a short-covering
rally as traders may lighten up positions ahead of the report.
direction of the Dollar will dictate the direction in June Gold today.
With inflation â€śsubduedâ€™ and the situation in Greece under control, it
looks as if gold will have to rely on the Dollar today. At the
mid-session, the stronger Dollar is helping to pressure gold. The daily
chart indicates that a test of $1099.70 to $1096.20 is likely before
new buyers step up.
Stronger demand for higher risk failed to
boost June Crude Oil, but this market is falling because of weakness in
the Euro. Upside momentum was building which could have driven this
market through a pair of main tops at 83.70 and 83.80. At the
mid-session, crude oil is trading sideways to lower. Unless the Euro
turns positive, look for more downside pressure into the close.
Dollar turned about mid-morning after a lower opening. Todayâ€™s U.S.
Consumer Confidence Data came out better than expected, boosting the
Greenback. Evidence is beginning to build which shows the U.S. economy
is recovering faster than the Euro Zone. This means the Fed is likely
to begin raising interest rates before the European Central Bank. In
addition, 10-Year Note yields have risen above the German Bund which is
making an investment in U.S. Treasuries a more attractive investment.
This is helping to pressure the June Euro at the mid-session.
June British Pound posted a strong gain this morning following an
upward revision in Fourth Quarter GDP. The final GDP figure showed the
economy expanded by 0.4% during the fourth quarter, up from the
previous estimate of 0.3%. Economists claim upward revisions in
services and construction were responsible for the increase. Despite
the bullish news, this market is still in a down trend and struggling
with a key 50% level at 1.5080.
Upside momentum slowed
considerably overnight which helped weaken the Euro along with better
than expected U.S. Consumer Confidence. The buzz over the European
Union/International Monetary Fund Greece bailout plan seems to be
fading also. As expected, the June Euro broke back into a minor 50%
retracement level at 1.3402.
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