Market Update for June 1
Well it's good to be back in the saddle after a week off. I needed a week off to recharge my batteries. I also moved into a new condo. I'm all settled now and I'm quite happy. Last week was the perfect time to get away as it was a holiday shortened week anyways in the US.
The item on everybody's mind each trading day continues to be Greece and whether there will be a Grexit or not. Greece needs to make a number of debt payments this month. As I said in my prior updates, I'm really tired of Greece overshadowing the markets. I believe it would be in all parties best interests if Greece were to leave the euro.
In terms of this week, the markets will be focused on four market moving events. We have a number of central bank meetings. On Tuesday we get the Reserve Bank of Australia's decision. On Wednesday we have the ECB and Thursday we get the Bank of England. On Friday we have the US employment report.
To start this week and the month of June, we continue to see a stronger US dollar. The yen made fresh lows last week. The euro bounced of the 1.08 level. The Aussie looks set to test the .75 level. It should be an interesting week nonetheless.
On today's agenda, we have:
03:50 EDT French Manufacturing PMI
03:55 EDT German Manufacturing PMI
04:30 UK Manufacturing PMI
08:30 EDT US Core PCE Price Index
08:30 EDT US Personal Income and Spending
09:05 EDT FOMC Member Rosengren speaks
09:30 EDT FOMC Member Stanley Fischer speaks
10:00 EDT US ISM Manufacturing Data
In the commodity markets, wheat prices tumbled last week on favorable weather. There's no shortage of wheat globally and US wheat prices are higher than other producers such as Russia, Canada and Romania. Both corn and soybeans look bearish as well with favorable weather keeping planting on schedule. Absent any weather, the grains look to remain in a bear market.
Oil prices rallied on Friday. I read news headlines that said it was because of a bomb attack on Saudi mosque. Another headline said it was because the rig count dropped again. My take is that the $56.50 level held. What can't go lower must go higher. We had a wave of short covering that sent prices higher. Nothing more, nothing less. In the natural gas market, it's a dog with fleas. Don't buy the drop in prices. In the precious metals market, it's all about the US Dollar. We'll see how the Dollar reacts this week to the data and that will determine how the commodity markets fare.
Right now I'm not seeing any trades that I want to put on. I'm not seeing any breakouts or breakdowns that I like. It's a data driven market and I will be closely watching the data to determine my next trades. In terms of stocks, I'm looking at a few new ideas and will be posting updates over at Seeking Alpha.
As always good luck to everyone and happy trading!
