U.S. equities indexes are digesting the CPI. Crude up this morning on a stronger risk appetite. Bill Baruch, president and founder of Blue Line Futures, previews E-mini S&P, Gold, Crude, Forex and Treasury markets and today’s economic calendar.

Bill Baruch’s Midday Market Minute short video for Dec. 12 here.
Stocks and Crude push higher Wednesday. Nasdaq has inverted head & shoulders pattern. Watch above 7000. The CPI was crucial, soft. Crude moving higher, trying to hold after EIA. USD lower.

Bill Baruch’s FX Rundown short video for Dec. 12-13 here.

The ECB holds their policy decision Thursday at 7:45 am and 8:30 am EDT. Brexit & U.S CPI have moved today's tape. What are our expectations, what do we think about USD, euro & Aussie?

 

E-mini S&P (December)

Tuesday’s close: Settled at 2641.25, down 1.75.

Fundamentals: U.S. benchmarks are battling higher this morning with a crucial read on CPI in the crosshairs. Tuesday, the S&P (SPX) ping-ponged between major three-star resistance and support trying to find direction. Despite some resilience in the latter half of the session, the close was disappointing. The tape quickly turned positive once again after the reopen on President Trump’s comments that teams from the U.S. and China are holding discussion to get a trade deal done. He surprised some in pointing to the Huawei arrest as a bargaining chip.

With the markets responding this morning, CPI must not be overlooked as it will certainly help define the Federal Reserve’s path of interest rate hikes ahead of next week’s meeting. The Core component which excludes food and energy is most closely watched. In fact, the Fed’s less hawkish rhetoric recently has been confirmed by Core CPI data; the YoY read has missed for three months running and while the MoM read was in line with the meager +0.2% gain last month it was soft coming in at +0.1% each of the prior months. If this inflation indicator shows much of the same, equity markets should respond favorably. However, a stronger than expected number will cap rallies.

The CPI for All Urban Consumers (CPI-U) was unchanged in November on a seasonally adjusted basis after rising 0.3 percent in October, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 2.2 percent before seasonal adjustment.

Technicals: The S&P is back near Tuesday’s high and faces major three-star resistance at ...

 

Crude Oil (January)

Tuesday’s close: Settled at 51.65, up 0.65.

Fundamentals: Overall volatility due to a reduced risk appetite, U.S. dollar (USD) strength and the aforementioned technical resistance all weighed on Crude Oil in the second half of Tuesday’s session.

However, just as we noted here, another constructive technical hold would open the door for inventory data to bring a tailwind of buying. Tuesday’s private API survey certainly did just that after they reported -10.18 mb of Crude, -2.484 mb of Gasoline and +712,000 barrels of Distillates.

While Crude is up about a dollar or 2% this morning and seeing support from what can be considered signs of a stronger risk appetite globally, the question is whether API is catching up to last week’s surprise numbers from EIA.

In fact, this composite read of -11.952 mb from API is much more closely aligned with last week’s EIA and not this week’s expectations of -2.99 mb Crude, +2.461 mb Gasoline and +1.801 mb Distillates.

If today’s official data confirms anything close to last night’s private survey, we expect Crude to be testing major three-star resistance once again. Tuesday’s Short-Term Energy Outlook from the EIA and today’s OPEC Monthly Report both widely went by the wayside as much of the comments were anticipated on the heels of last week’s OPEC meeting and with a much larger focus on today’s EIA data.

Technicals: While we remain upbeat on Crude at this level, it cannot go unnoticed that there are multiple strong waves of resistance. Price action is facing first key resistance at... 

 

Gold (February)

Tuesday’s close: Settled at 1247.2, down 2.2.

Fundamentals: Gold continues to hold ground at the psychologically significant $1250 mark with marginal pullbacks being defended by the bulls. The overall less hawkish rhetoric from the Fed was confirmed once again with CPI MoM coming in at zero and the Core read excluding food and energy coming in at expectations after a string of softness. News this morning that China is going to revise their Made in China 2025 signals a willingness to come to the trade table; while this has pressured the dollar, it has support risk assets. At this level in Gold, if risk assets recover, Gold’s upside before next week’s Fed meeting is likely limited.

Technicals: Our narrative is that of a broken record, we remain unequivocally bullish Gold. Still, traders must realize that major three-star resistance at ... 

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