U.S. equity prices are
trading better after getting a boost from better than expected ISM
Non-Manufacturing data and an unexpected positive change in pending
home sales. Stocks are grinding higher today. Many traders feel the
market is overbought, but at this time there is no alternative to the
yields that stocks have been delivering. Although this market is
trading higher, gains could be limited by higher interest rate worries.
There is no technical significance of an 11,000 Dow, but
psychologically, crossing this barrier this week could trigger a surge
to the upside as it will give traders a confidence boost.
stronger U.S. economic data is helping to pressure June Treasury Bonds
and June Treasury Notes. Yields are rising which could pull money out
of equities. We could be looking at the start of a bear market in
The weaker Dollar is triggering a rally in June Gold
and June Crude Oil. Generally speaking, when the Dollar weakens, demand
goes up for Dollar-denominated commodities.
The U.S. Dollar
opened down and remains lower against most major currencies as traders
seem to be reassessing Fridayâ€™s employment report while brushing aside
todayâ€™s jump in ISM Non-Manufacturing and the unexpected surge in
pending home sales.
The Dollar seems to be holding its ground
versus the Euro. At the mid-session the June Euro is slightly lower.
The strength in the U.S. economy should have been enough to weaken the
Euro substantially along with the developing lack of confidence in the
Greek financial bailout proposal. Instead, the Euro is hanging in there
as it approaches retracement zone and trend line resistance.
June British Pound is trading better, but having trouble with a key 50%
level at 1.5294. Although recent reports have shown that the U.K.
economy is growing, doubt continues to linger about the outcome of the
election and the potential hung parliament that could hamper the
countryâ€™s effort to reduce its budge deficit.
The June Swiss
Franc is trading in a tight range as traders await direction from the
Euro. The Swiss is higher but conditions could shift if the Euro
weakens substantially as traders will build a possible intervention by
the Swiss National Bank.
Early Sunday night, the June Japanese
Yen broke to its lowest level since August 2009. Oversold conditions
and position squaring ahead of tomorrowâ€™s Bank of Japan meeting has put
this pair in a position to form a daily closing price reversal bottom.
gold and crude oil is helping to boost the June Canadian Dollar. Strong
commodity prices and the outlook for a better economy are helping to
drive this currency toward parity. Traders are also pricing in the
strong possibility the Bank of Canada will raise interest rates before
the Federal Reserve.