The U.S. dollar index is a basket of six major currencies weighted against the greenback. See on the daily bar chart that the USDX has moved right up to challenge stiff chart resistance at the recent highs. A move in prices to new for-the-move highs would give the USDX bulls more power and would also suggest another leg up in prices in the coming weeks and possibly months. The strong dollar is a negative for the raw commodity sector. Most major raw commodities are priced in U.S. dollars on the world markets. When the dollar appreciates on the foreign exchange market, it makes those commodities more expensive to purchase with other currencies. Stay tuned!
Daily Morning Report
Busy Day for U.S. Data Thursday, as Equities Markets Pause
Thursday, April 18–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Asian and European stock indexes were mixed to weaker overnight. U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins.
The marketplace, especially the FOREX sector, is keeping a very close eye on the Turkish lira, which has weakened significantly against the U.S. dollar recently. There are concerns about Turkey’s low foreign currency reserves that would have to be used to defend the lira in case speculative FOREX traders mounted a selling attack on it.
The U.S.-China trade negotiations are continuing and apparently the world’s two largest economies are moving closer to a final agreement. There is talk in the marketplace that President Trump and Chinese President Xi Jinping could meet next month to seal the deal.
The key outside markets today find the U.S. dollar index higher, as the Euro currency is pressured by some weak manufacturing data coming out of the Euro zone today. Meantime, Nymex crude oil prices are slightly down and trading around $63.75 a barrel.
It’s a busy day for U.S. economic reports due for release Thursday, including the weekly jobless claims report, the Philadelphia Fed business survey, retail sales, the flash U.S. services and manufacturing purchasing managers indexes, manufacturing and trade inventories, and leading economic indicators.
Upbeat China Economic Data Lifts World Stock Markets
Wednesday, April 17–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Asian and European stock indexes were mostly higher overnight. U.S. stock indexes are pointed toward modestly higher openings and near Tuesday’s six-month highs when the New York day session begins. The U.S. indexes are closing in on their record highs scored last fall.
Investors and traders continue to exhibit “risk-on” mentalities, as evidenced by the world stock markets trending higher and safe-haven gold and silver prices trending lower.
China’s gross domestic product report came out Wednesday and showed slightly better-than-expected growth of 6.4% in the first quarter, year-on-year. Stronger industrial production and retail sales were cited as boosting GDP. Most were expecting upbeat numbers just north of 6% annual GDP growth for the world’s second-largest economy.
In other overnight news, the Euro zone consumer price index for March showed a rise of 1.0% from February but was up only 1.4% year-on-year. Meantime, the U.K. CPI came in at up 0.2% in March and up 1.9% year-on-year. This continues a theme of very tame inflation in the world’s major economies.
An important change in market psychology has occurred just the past few weeks. Government bond yields in the world’s major economies are on the rise, after seeing their yields decline the first two months of the year. This is due in part to little risk aversion in the marketplace that is seeing monies flow into stock markets, which in turn prompts bond yields to rise in order to attract investor buying interest.
The key outside markets today find the U.S. dollar index weaker. Meantime, Nymex crude oil prices are higher and trading around $64.50 a barrel.
U.S. economic reports due for release Wednesday include the weekly MBA mortgage applications survey, the international trade report, monthly wholesale trade, the Federal Reserve’s beige book and the weekly DOE liquid energy stocks report.
–Jim
U.S. Treasury Market Bulls Are Fading, Need to Show Fresh Power Soon
The U.S. Treasury bond and Treasury note futures are in fledgling downtrends on their daily bar charts and the bears have some momentum on their side. Right now, it’s still my bias that these fledgling downtrends are just downside corrections from recent gains that pushed prices to contract highs in March. However, more strong selling pressure in the near term would suggest a market top is in place and that prices would continue to trend down in the coming weeks. This week’s price action in the U.S. bond markets will be extra important. Stay tuned!
Markets Quieter Ahead of China GDP Report Wednesday
Tuesday, April 16–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Asian and European stock indexes were mostly higher overnight. U.S. stock indexes are pointed toward higher openings and at six-month highs when the New York day session begins. The U.S. indexes are closing in on their record highs scored last fall.
There are presently no major geopolitical issues in the world marketplace to rattle the markets and trader and investor attitudes remains generally upbeat. In the U.S., the world’s largest economy is growing modestly to a bit better, but the Federal Reserve does not appear inclined to raise interest rates. Many reckon that’s a “Goldilocks” scenario for the stock market.
The key outside markets today find the U.S. dollar index slightly up. Meantime, Nymex crude oil prices are slightly higher and trading around $63.50 a barrel.
The marketplace is awaiting China’s gross domestic product report due out Wednesday morning. Most are expecting upbeat numbers north of 6% annual GDP growth for the world’s second-largest economy.
U.S. economic reports due for release Tuesday include the weekly Goldman Sachs and Johnson Redbook retail sales reports, the NAHB housing market index, and industrial production and capacity utilization.
–Jim
Marketplace Quieter to Start Trading Week; No Geopolitical Turbulence at Present
Monday, April 15–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Asian and European stock indexes were steady to mixed in quieter dealings overnight. U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins. There are presently no major geopolitical issues in the world marketplace to rattle the markets and trader and investor attitudes remains generally upbeat, as evidenced by most world stock markets trending sideways to higher at present.
Focus of traders and investors this week will be on U.S. corporate earnings reports. Big bank reports issued last Friday were surprisingly upbeat.
U.S.-China trade talks will continue this week, with most market watchers thinking good progress has been made on the matter and both sides are close to a final agreement.
The key outside markets today find the U.S. dollar index weaker. Meantime, Nymex crude oil prices are lower and trading around $63.25 a barrel.
U.S. economic reports due for release Monday include the Empire State manufacturing survey, and Treasury international capital data.
–Jim