US Markets With Hakwish Comments and Earnings

US stock markets with the SPX Futures contract are down by about 0.6% as investors monitor earnings and how markets react to the recent comments on monetary policy.

The Fed’s Bullard mentioned he would favor a terminal rate of about 5.50% and 5.75% while Bostic sees one more rate hike of about 25 bps before a potential halt of further hikes. Currently a rate ease is expected around November and December with higher probabilities which pressures markets as the easing projection moved from July to November.

Mixed and weakening earnings reports seemingly are another bearish factor to conclude into the current more likely bearish biased market structure while depending on the New York trading opening’s auction process, which tends to lean on buying, the market may lift higher by absorption.

The hawkish comments come along with a higher dollar which pressures commodities such as Gold which is down by about 1.6% and Crude oil which fell by about 1.7%. Meanwhile, Bitcoin which rallied recently due to the banking crisis fell by about 4% in the European trading session.

European inflation eased towards 6.9% from 8.5% by the central bank’s efforts to tighten monetary policy with current viewpoints of another rate increase of about 50 bps or 25 bps. The lower inflation read pressured the euro lower by about 0.3% against the dollar in the early trading session.

Looking at the E-mini S&P 500 we can observe some selling and long liquidations around the swing high back from February on the daily interval. Further hawkish remarks might lead the market to cycle down in a bearish rotation while any positive hints towards a dovish projection might lead core buyers to add to positions around VWAP key levels of the Quarterly and Yearly perspective. Another viewpoint to monitor in the short-term perspective is the lower volatility for the month which might surprise a soaring market, depending on economic data or events. Current calculations, which are slightly mixed, might point towards a balanced market behavior as traders could lean on the extremes to conclude a particular bracket area.

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The intraday perspective is imbalanced and out of the prior price range. The New York trading session might be able to lead the market back into the previous price range by buying around the swing lows from Monday’s session. However, current bearish calculation would point core sellers to add around the developing VWAP. 

Original post by The Private Banker.

Copper Concerns Of Lower Supply And Rate-Increases

 Copper, which fell by about 0.5% and trades around $4.08 per pound in the European trading session, is elevated by a weaker dollar and higher demand with concerns of lower supply.

Chinese credit growth is strong and supports the nation’s intentions to support the infrastructure construction which supports the price of the base metal.

The London Metal Exchange shows that inventories fell towards 56,000 tonnes which is the lowest since 2005, driving the price even higher as Goldman Sachs projects a global shortage of copper inventories around September.

The state owned company Codelco from Chile estimated that output will sink around 7% after a 10.6% decline in the prior Year. Supply concerns seemingly are the pressure factor as prices get driven higher just like with the OPEC+ production cuts for the oil price. This might add to the inflationary pressure, prompting central banks to conclude the best projections for interest rate hikes. The current more dovish view with potential cuts around July to November might be lifting for commodities as the dollar is weakening.

Looking at the technical perspective of the Copper market we can observe some selling around the Year’s upper value extreme on the daily interval. Seemingly the market closed with a selling tail and absorption in combination with long liquidations around the prior swing highs which could initiate the price to pullback as rotation to the developing VWAP or lower value extreme as secondary buying option for core long positions.

Taking a glance at the current TPO profile structure of this market, we can observe a balanced prior structure as the market cleared the unsecured low and might hit absorption to bring the price back into the previous price range which could initiate more buying. For the moment, the market is imbalanced with a slightly bearish bias for this session. Any bullish scenarios might target the prior POC level.

Current calculations, including the aspect of volatility, might show a mixed view which could lead the market to a balanced behavior, confluent with the fundamental supply concerns and the technical perspective.

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The managed money sector is more likely mixed as investors seemingly closing positions on both sides as of the COT data from the 11th April while net buying increased for three weeks.

Hawkish remarks by Fed Gov. Waller that inflation is too high spurred the fears for additional rate-increases in combination with visible weakness in the U.S. economy by lower-than-expected retail sales, pointing to lower spending. And the higher inflation expectations, pressures commodities and equities for the session.  

Original post on The Private Banker.