U.S. equity markets are
trading higher but giving back some of their gains at the mid-session
after investors drove up world stock markets on the prospects of a
faster than expected global economic recovery.
rally began when China reported better than expected PMI Manufacturing.
The move continued following a friendly U.S. Weekly Initial Claims
Report. This news drove the June E-mini NASDAQ and June E-mini S&P
to new highs for the year. Despite a better than expected U.S. PMI
Manufacturing Report, buying dried up and the markets settled into a
At first glance, the inability to
accelerate through the highs for the year is a sign of developing
weakness, but one has to remember that thin trading and low volatility
ahead of tomorrowâ€™s U.S. jobs report may be keeping major market
players on the sidelines.
June Treasury Bonds and Treasury Notes
broke as yields rose slightly following the positive initial claims and
manufacturing reports. A strong employment report tomorrow could send
yields through the roof as traders begin to price in the possibility of
a rate hike by the Fed led by concerns of a flare-up in inflation.
main trend remains down, but the weakness in the Dollar has put gold in
a position to challenge the recent main top at $1133.90. A breakout
through this price will turn the main trend to up.
global manufacturing reports drove up demand for June Crude Oil sending
this market within striking distance of the high for the year at 85.95.
Technically, upside momentum is building following the breakout through
the last two main tops at 83.70 and 83.80.
The U.S. Dollar is
trading lower against most major currencies as traders take advantage
of thin market conditions ahead of tomorrowâ€™s key U.S. Non-Farm
Payrolls Report. Earlier in the session the Dollar rose slightly
following a decline in U.S. Weekly Initial Claims before being overcome
by aggressive buying of higher yielding assets. Signs that the global
economy may be recovering faster than previously thought is helping to
pressure the Dollar led by strong rallies in the British Pound and
The June Euro is trading higher one day after
the main trend changed to up on the daily chart. Traders have chosen to
ignore potential problems developing in Greece over its ability to
finance its debt and instead have decided to focus on improvements in
the Euro Zone economy. The charts indicate this market is on target to
test a resistance cluster at 1.3610 to 1.3620 after regaining a 50%
level at 1.3452.
The June British Pound is surging this morning
following a better than expected U.K. manufacturing report and a
positive poll showing that the chance of a hung parliament is
decreasing. Close to the mid-session, the British Pound was testing a
50% level at 1.5297. Overtaking this level could trigger an
acceleration through the last swing top at 1.5381, turning the main
trend to up.