Daily Analysis – Metals Soar and Treasuries Tumble |
Equities
Major Asian markets were mostly lower on Tuesday, as China’s Shanghai Composite fell another 1.7%, adding to Monday’s 1.9% loss. The Hang Seng dropped .9%, and the Nikkei closed down .6%.
In Europe, volume remained low as London’s markets remained closed for another day. The major indexes ended little changed with the DAX and CAC 40 both closing less than .1% off their previous close.
US markets ended mixed in yet another slow day The Dow gained 21 points, rising to 11575, after hitting a fresh 52-week high of 11591 earlier in the day. The Nasdaq slipped .2% to 2663.
Treasuries and Commodities
A $35 billion in 5-year notes drew weak demand, with the yield above the secondary market rate and a low bid to cover ratio. 5-year notes fell 18/32, pushing the yield up to 2.16% from Monday’s 2.02%. 10-year notes fell 1 8/32 to yield 3.49%, and 30-year notes tumbled 2 8/32, to yield 4.54%.
Yields Jump as Treasuries Sell Off
A $29 billion auction in 7-year notes is due on Wednesday.
Crude oil rose .26 to 91.26, and natural gas rallied 2.5%.
China announced cuts in rare earth metal exports, sending metal commodities higher. Gold jumped 24.30 to 1406.70, and silver surged 3.4% to 30.24. Copper closed at another record high of 4.32, up 1.2%.
Currencies
Volatility was the theme of the day in the currency market.
The Euro initially rallied up to 1.3275 but then sold off swiftly to close at 1.3118, down .0045. The Swiss Franc rallied to a new record high of .9434, and closed at .9517 up .9%.
The yen surged as well, rising as high as 81.81 and closing at 82.45, up .4%.
The Canadian Dollar settled at .9998, up .7% adter touching .9974 earlier in the day.
Economic Outlook
Today’s economic reports were weak. Consumer Confidence came in below expectations (52.5 vs. 56) and the Case-Schiller price index showed a decline in home prices for October.
Wednesday’s economic calendar will feature MBA mortgage applications and weekly oil inventories.
The 7-year Treasury auction will be closely watched after today’s 5-year auction disappointment which sent bonds tumbling.
Europe is currently out of the news but not out of trouble, as the Euro and Pound’s exchange rates reflect.
About the author: BinaryOptionStrategy- David Frank
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