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Markets Reopen Tonight. Crude Awaits OPEC Jawboning. Gold Holding Today
12/05/2018 1:30 pm EST
Today is a national day of mourning in honor of the 41st President George H.W. Bush. U.S equity and interest rate futures closed at 9:30 am EDT and reopen for their regularly scheduled Thursday session at 6:00 pm EDT tonight., writes Bill Baruch Wednesday.
Bill Baruch’s FX Rundown short video for Dec. 4-5 here.
Crude Oil (January)
Tuesday’s close: Settled at 53.25, up 0.30.
Fundamentals: Today’s EIA inventory report has been rescheduled for tomorrow at 10:30 am EDT. Still, API released their private survey after the close yesterday and it sent Crude Oil lower as it showed the potential for an eleventh straight build in inventories; +5.36 mb Crude, +3.61 mb Gasoline, +4.32 mb Distillates, +1.44 mb at Cushing. This was undoubtedly a very bearish report, especially relative to expectations that were calling for a draw of more than 2 mb of Crude.
Those expectations for tomorrow’s report have been revised to -0.942 mb Crude, +1.18 mb Gasoline and +1.3 mb Distillates. Ultimately, Crude has held extremely well given this API report coupled with the bloodbath in equity markets yesterday from a contracted risk appetite. This is because the major focus this week remains the OPEC meeting in Vienna that begins tomorrow. Tuesday, we said a factor in Crude Oil’s rise overnight and into Tuesday morning was the fact that the EIA report was delayed which might diminish its effect as it is drowned out by OPEC; there were reports of a 1 mb SPR release last week.
Uncertainty surrounding this OPEC meeting is the only certainty, this can be seen through what feels like a dialed back dose of jawboning when compared to other pivotal meetings in the past. Our narrative this week remains the same, Bill Baruch joined Bloomberg on Monday to discuss the impact of the trade truce with China coupled with this week’s OPEC meeting.
Technicals: Crude Oil tested major three-star resistance at ...
Tuesday’s close: Settled at 1246.6, up 7.0.
Fundamentals: Gold is holding at the highest level in a month. Government data for today including the private ADP Survey and ISM Non-Manufacturing have been rescheduled for tomorrow. The U.S. dollar (USD) has stabilized slightly from the low early in Tuesday’s session. Yesterday’s risk-off move which was most notable in equity markets did not help Gold. Treasury prices surged higher on the tailwind provided by the 5-year yield dipping below the 3-year yield in an inversion. Although this is a very favorable landscape for Gold as it invigorates recessionary fears, the other catalyst in the risk-off move was the diminished expectations of the 90-day trade truce between the U.S and China. This encouraged the dollar’s strength in the second half of yesterday’s session. Furthermore, an additional tailwind for the dollar was provided by comments from NY Fed President Williams who sees continued rate hikes. All in all, as we stated above, Gold is holding very well, however, traders must understand the significance of Friday’s Nonfarm Payroll report when positioning.
Technicals: We remain unequivocally Bullish in Bias Gold, especially for the long-term. The chart has been extremely constructive in recent days, but this is also when you must be on the lookout for potential technical (and fundamental with Nonfarm Payroll) headwinds; major three-star resistance is at ...
View a short video: Bill Baruch: Trading Futures. Gold, USD, yuan.
Recorded: TradersExpo Chicago July 24, 2018.
Related: View a short video with Dan Gramza: USD, Crude & OPEC here.
Recorded: TradersExpo Las Vegas, Nov. 13, 2018.
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