from Saxobank futures-fwiw
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Published: Feb. 03 2006, 13:46 GMT
Precious metals stealing the headlines with new highs.
Treasuries: Market is waiting the employment report.
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Energies
Energy Markets came under some pressure yesterday as the decision by the IAEA not to refer the Iranian nuclear issue to the UN Security Council was citied to the market. The threat of bullish demand from a potential restrictive supply sanctions in the middle east are, at this current space in time, dissipated.
IAEA Director General Mohamed ElBaradei said; "We are reaching a critical phase but it is not a crisis situation......We will see how the Board will decide on the kind of resolution they will adopt... All who have spoken on the issue, even those who are supporting Security Council reporting, are making it very clear that the Security Council is not asked, at this stage to take any action, definitely not before I submit my report in March. All of them are saying that this is simply a continuation of diplomacy."
All the market action supported this statement yesterday, with sentiment in the energy markets pointing lower. Yesterday constitutes a major shift in short term momentum, confirming our short in the short term, long in the long term view in Brent Crude.
Any upticks in the crude provide a selling opportunity. Find resistance in the March '06 Brent Crude contract at 63.40. This level provides a fresh selling opportunity, keeping our target at 61.30.
Trade Strategy: Short March Brent Crude (LCOH6) at 64.99. Stop above 63.76. Target 61.30.
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Metals
Gold found the strength to set a new record high at $580 on a relative quiet session. Today´s employment numbers could be bearish for Gold if they come out better than the 250K expected with more tightening from the Fed in the future. Resistance at $580 and support at the 573.54 level.Silver tracking gold with resistance at $9.92
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Treasuries
Lackluster session yesterday, traders waiting the NFP figures today. Market is looking for a strong 250k Payroll and it should be a price mover. Intraday first Support at 107-29 and then 107-18 in the US 10 yr TNote. Resistance at 108-15. Nevertheless, we would be surprised to see the downtrend resuming, the market is heavily short and a strong payroll is already priced in, we could see some profit taking. Bunds are clearly in an oversold territory and in the case of a weaker than expected NFP we could have a relief rally targeting the 120.60 level. If 119. 79 broken look short term for 119.20 and 118.97.
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AI
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