Recovery pace may not be a fast a originally hoped, but is moving forward. Grains may have hit their season lows.
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Euro-Zone Optimism Keeps Equities Up Overnight
Stocks seems to believe the EU will get its act together. Gold however, is acting like a flight-to-quality investment.
A “Buy The Rumor” Mentality Lending Support the Market
Bit of a “risk-on” feeling to the markets this morning. Reasons why are unclear with things being uncertain as the size and type of the EU package. Good numbers out of China and Europe and a better than last month Chicago Fed’s National Activity index also helping support the markets.
Corn showing strength this morning off strong ethanol production and export sales. Also, some news there are some problems with rice production and some damage to warehouse stocks.
Payrolls Better Than Expected
Economy may not be as bad as feared with the payroll report being better than expected. While not an indication that things are great, things may not be as recessionary as feared. If you removed the over all fear of global economic mayhem, physical commodities should start trading on their own fundamentals.
Supportive News Out of EU; China Corn Production Concerns Support
A bit of an exhale on the European debt crisis with news of a plan that would attempt isolate the problems. Bernanke warns of weak US economy, but promises to support the economy if necessary. This tamped down flight-to-quality buys of bonds and precious metals. Some private jobs numbers out this week ahead of the US numbers Friday. The corn markets seems to have found some support from production concerns out of China and US acreage reductions.
Euro Zone Woes Continue
The Euro-Zone Debt problems continue to be the “gift that keeps on giving” with Greece saying that it will not be able to meet it’s financial targets. US numbers last week were better than expected. Physical commodities are under some pressure, but gold and silver have moved back to a flight-to-quality role again.
Equity Indexes are Weaker; US Dollar Higher; Metals Back to Flight to Quality
Slides in many equity indexes are showing a return to slowing economic conditions. Slowing numbers out of EU add to that sentiment. Precious metals may be returning to a “flight-to-quality” role with the inverse relationship with equities returning. Grain markets have some critical numbers this morning with focus on tightening supplies and concerns about ongoing demand.
Favorable Vote out of Germany; Commodities May Get a Lift
At least in the early going there is a tamping down of the EU crisis with the favorable vote from the Germany. The trade may be thinking, however, that the damage has already been done. Markets may turn now to the US situation and the struggles the Debt Committee is having achieving its goals.
Physical commodities may get a slight lift today with a weaker Dollar and reduced uncertainty out of Europe. There doesn’t seem to be much conviction and a return to September lows is a possibility.
Plans Out of the EU Providing a Lift
Quite a change over the last 24 hours. It seems that the September wash-out in commodities has, at least temporarily, run its course.
Something of a “Risk On” Tilt but General Outlook not Improving
Something of a “risk on” mentality this morning. Gold, Silver, Platinum and other physical commodities saw big range down moves over night, but are trading above those lows. This could be in response to the hope of moves by the EU to prevent collapse. However, the overall economic outlook has not improved.
