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Posted by Tango
on May 1, 2020, 6:42 am
The morning began with selling, setting the low for the morning so far and again establishing 105.00 as a support level, although the market feels as if it wants to go lower. However, bids are present and continue to populate the months of 2021. Yesterday many bids were hit as front selling linked spreads to the forward bids. JulSep dropped to -1.45 bid and SepDec to -1.95 bid. Both have recovered for now to -1.20 bid and -1.80 bid respectively. Although the weakness in the spreads is as a result of likely consumer sector buying, the strength can be attributed to the falling warehouse stocks and the interruption of supply chains in producing countries. It is also worth noting that the selling has been new and is in July mostly, hinting that it is of a speculative nature. There is still no indication of systems present in the market. So there may be periods of strength as we saw yesterday. Possibly selling strength is the strategy of the day?
Key currencies are mixed rendering a lower $Index while BRIC currencies are all lower against the $. USDMXN is 24.4341 +0.2831 (+1.17%), USDCOP is 3,956.00 +3.42 (+0.09%) and USDBRL which closed at 5.4858 is 5.5614 +.0756 (1.38%) on the CME. But apparently the Real weakness is not prompting any forward origin selling.
Bond futures are recovering from yesterday’s weakness. Equities are sharply lower. Gold is lower but steady. Crude and grains are lower. The softs are all lower.