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Posted by Tango
on May 24, 2019, 7:10 am
The market dipped after the opening and slowly began to strengthen reaching resistance levels. Selling is certainly present and has quickly built up from 94.50 upwards. The buy side for now is sparse. 8:00 will likely bring buying from shorts but delta longs will need to hedge or wait to see how the weather plays out in Brazil during the long weekend. The arbitrage widened yesterday to close at 31.40 and is now 31.86 indicating a more enthusiastic KC. Spreads are on the steady side in the front but softer in the back. RC spreads are also steady in JulSep. There was little forward selling yesterday and none today thus far. Yesterday’s market was continuously pressured but failed to break 90.00. The recovery was immediate after stops were hit, and was impressive.
Currencies are higher against the $, but the ¥ is lower today. The Yuan and other markets are also higher. USDMXN is 19.0309 -0.0061 (-0.032%), USDCOP is unchanged at 3,375.6299 and USDBRL which closed at 4.0394 is indicated at 4.0390 in the equivalent to spot on the CME.
Gold and silver are lower in spite of the weaker $. Apparently interest rates are more of an indicator for these metals. Bond futures are lower and on the soft side. Oil is higher after yesterday’s drop. All the softs are on the positive side.
Today is Friday prior to the long weekend. Short covering has been taking place. It should continue but ultimately the fate of any potential upward move lies in the hands of the longs.