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Posted by Tango
on January 22, 2020, 7:13 am
RC is again steady as it opened with buying and has held. The arb is at 50.71 indicating greater weakness relatively in KC. On its own, KC has made attempts to move higher and continues to encounter pressure. Yesterday volume was considerably higher than it has been as initial weakness found great support, likely commercial. Prices hardly broke 110.00 when buying suddenly came in moving the market 3.50c higher from the lows. Higher prices and a weak Real attracted selling possibly from several sources including origin. A variety of activities, including, EFP, EFS, block trades and forward selling in the form of outright and EFP extending out to Dec22 took place. The buying ceased and weakness controlled the market again but again finding support including forward buying in the mid months. Different forces are at play, including in RC. Selling will likely intensify at 8:00 but, as we saw yesterday, sporadic entry into the market by other sectors can easily occur. With enough buying, fund reversal can occur but for now weakness prevails.
Th$ Index is higher with mixed currencies globally, including a higher Yuan. USDMXN is 18.745 -0.0175 (-0.0933%), USDCOP is unchanged at 3,353.60 and USDBRL just opened at 4.1993 -0.013 (-0.3086%), in line with the CME.
Bond futures are slightly lower but the 30 year is higher and steady. Equities are higher while metals are lower. Crude is lower while grains are higher. All softs are higher.