The U.S. dollar index is a basket of six major world currencies weighted against the greenback. The USDX is a good gauge of the overall health of the U.S. economy. This week the USDX has rallied and its price is close to the multi-month high scored a few weeks ago. The greenback bulls have regained technical power to suggest a challenge of the March high, and even higher. Stay tuned!
Gree
Daily Morning Report
World Stock Indexes Mostly Firmer Friday, Amid More Upbeat Attitudes
Friday, March 29–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Asian and European stock indexes were mostly firmer overnight. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins. Today is the last trading day of the week, of the month, and of the quarter, which makes it an extra important trading day from a charts and technical perspective. Traders and investors are exhibiting a bit more risk appetite late this week, which has buoyed world stock markets but has helped to sink the safe-haven gold and silver markets.
The U.S. and China held high-level trade talks in Beijing late Thursday and Friday. U.S. Treasury Secretary Steven Mnuchin said those talks were productive. However, Larry Kudlow, President Trump’s economic advisor, said on Thursday any final U.S.-China trade accord is likely to come months down the road. There is no clear consensus in the marketplace on the eventual outcome of the U.S.-China trade talks, which means that when any final result is announced it is likely to cause at least some volatility in some markets.
The U.K. Parliament is likely to vote Friday on another option offered by Prime Minister Theresa May to break the Brexit deadlock. There are not high expectations for her latest plan to be approved by the MPs. Today is the day the U.K. was set to leave the European Union. May’s options moving forward on the matter are increasingly limited, with speculation of a general election being held in the near future.
The key outside markets today see the U.S. dollar index higher and hitting another 2.5-week high today. The USDX is back near its recent multi-month high. Meantime, Nymex crude oil prices are higher and trading around $60.00 a barrel. Oil prices are still trending higher on the daily bar chart even though price action has been sideways this week.
U.S. economic reports due for release Friday include personal income and outlays, the Chicago ISM business survey, new residential sales and the University of Michigan consumer sentiment survey.
–Jim
World Stock Markets Firmer; U.S. 4Q GDP on Tap Thursday
Thursday, March 28–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Asian and European stock indexes were mostly firmer overnight. U.S. stock indexes are pointed toward weaker slightly higher openings when the New York day session begins.
There was more dour economic news coming out of the European Union Thursday, as Euro zone factory export orders fell to a two-year low. The European Commission’s Economic Sentiment indicator—a combination of business and consumer sentiment–fell to 105.5 in March from 106.2 in February, for the lowest reading in 2.5 years.
On the Brexit front, the U.K. Parliament late Wednesday rejected all eight options offered by Prime Minister Theresa May to break the Brexit deadlock. May’s options moving forward on the matter are increasingly limited, with speculation of a general election being held in the near future.
The U.S. and China are holding high-level trade talks that are taking place in Beijing. The key figures were meeting for dinner Thursday evening. There is no clear consensus on the eventual outcome of the U.S.-China trade talks, which means the final result could cause volatility in markets.
The U.S. economic data point of the day is the third reading on fourth-quarter gross domestic product. GDP is seen up 2.2% versus the last 4Q estimate of up 2.6%.
The key outside markets today see the U.S. dollar index higher. Meantime, Nymex crude oil prices are weaker and trading just above $59.00 a barrel.
U.S. economic reports due for release Thursday includes the weekly jobless claims report, the third estimate of four-quarter gross domestic product, the Kansas City Fed manufacturing survey, and pending home sales.
–Jim
Nymex Crude Oil Prices Continue to Trend Up
Nymex crude oil futures prices continue to trend higher, including this week briefly pushing above the key $60.00-a-barrel level. The oil market bulls have the firm near-term technical advantage to suggest prices continuing to trend sideways to higher in the near term. This is also good news for other raw commodity markets, given crude oil’s status as the leader of the raw commodity market sector. Stay tuned!
Falling World Government Bond Yields Send Warning to Marketplace
Wednesday, March 27–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Asian and European stock indexes were mostly down overnight. U.S. stock indexes are also pointed toward weaker openings when the New York day session begins. There is some elevated risk aversion in the world marketplace at mid-week, mainly due to worries about slowing global economic growth.
In overnight news, the German government auctioned its 10-year note (bund) for an average yield of -0.05% versus a yield of 0.12% for bunds auctioned on Feb. 27, and the first negative yield since 2016. A feature in the marketplace recently has been falling government bond yields in the major industrialized countries. U.S. Treasury yields briefly inverted last week when the short-term 3-month note yield moved above the 10-year note yield. Today, U.S. T-Bond and T-Note futures prices hit contract highs.
There was more weak economic data coming out of China today, as its industrial profits for the first two months of this year dropped by 14%–the biggest drop since 2011. Lower factory gate prices and lower sales were blamed. U.S. tariffs on China’s imports into the U.S. are also likely to blame. The U.S. and China continue high-level trade negotiations beginning Thursday.
The key outside markets today see the U.S. dollar index near steady. Meantime, Nymex crude oil prices are weaker and trading around $59.50 a barrel.
U.S. economic reports due for release Wednesday include the weekly MBA mortgage applications survey, the international trade report and the weekly DOE liquid energy stocks report.
–Jim
Marketplace Quieter Early this Week, Ahead of Key Events Late-Week
Tuesday, March 26–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Asian and European stock indexes were mixed overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins. Trading is more subdued early this week, amid a lack of major news to move markets and ahead of key events later this week that include high-level trade talks between the U.S. and China, and gross domestic product data coming from several countries.
A feature in the marketplace recently has been falling government bond yields in the major industrialized countries. U.S. Treasury yields briefly inverted late last week when the short-term 3-month note yield moved above the 10-year note yield. In Germany, government bond yields are now just into negative territory. Worries about economic growth in the major countries, combined with very low inflation, are prompting the falling bond yields (rising prices).
The key outside markets today see the U.S. dollar index slightly weaker on a corrective pullback from solid gains late last week. Meantime, Nymex crude oil prices are higher and trading around $59.50 a barrel.
U.S. economic reports due for release Tuesday include the weekly Goldman Sachs and Johnson Redbook retail sales reports, new residential construction, the S&P/Case-Shiller home price indexes, the consumer confidence index, the monthly house price index, and the Richmond Fed business survey.
–Jim