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Jim Wyckoff's Morning Report: Market Place Awaits Jobs Report

03 May 2013
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - The market place awaits Friday morning’s US jobs report for April. The key non-farm payrolls figure is seen coming in at up 148,000, with the unemployment rate seen unchanged at 7.6%.

Given recent weaker U.S. economic data, many market watchers reckoned the jobs report would be on the weak side. 

Government bond yields in Europe declined Friday, with some yields at record lows, following European Central Bank President Draghi’s comment Thursday that negative ECB deposit rates cannot be ruled out. European Union producer prices fell by 0.2% in March, it was reported Friday, and fell to a three-year low annual rate of up 0.7%.

Those numbers would allow the ECB to further ease monetary policy at some point. Traders are still digesting this week’s meetings of the Federal Reserve’s FOMC and the the European Central Bank.

The ECB on Thursday cut its key interest rate by 0.25%, to 0.5%, which was expected by many market watchers.

ECB’s Draghi at this monthly press conference following the ECB meeting said his central bank could even charge a negative interest rate if economic conditions in the EU warrant.

The FOMC statement on Wednesday saw the Fed made no mention of a timeframe for winding down its quantitative easing program and said it could adjust its bond-buying up or down based on U.S. economic conditions.

The market place is reading these two meetings’ results as friendly for the raw commodity and stock market sector. The Fed and ECB appear intent on leaving their monetary policies very “easy” for at least the next several months, if not longer.

Raw commodities late this week are in a general rally mode following the FOMC and ECB meetings. U.S. economic data due for release Friday includes the jobs report, manufacturers’ shipments and inventories, and the ISM non-manufacturing report on business. -Jim

US Dollar Index

The U.S. dollar index is weaker in early U.S. trading. Slow stochastics for the dollar index are bullish early today.

The dollar index finds shorter-term technical resistance at the overnight high of 82.310 and then at Thursday’s high of 82.415. Shorter-term support is seen at the overnight low of 81.990 and then at 81.780. Wyckoff's Intra Day Market Rating: 4.5

NYMEX Crude Oil

Crude oil prices are firmer early today. Trading has been very choppy this week, but bulls have regained some upside momentum. In June Nymex crude, look for buy stops to reside just above resistance at this week’s high of $94.69 and then at $95.00.

Look for sell stops just below technical support at $94.00 and then at $93.00. Wyckoff's Intra-Day Market Rating: 5.5


Markets were firmer in overnight trading. The U.S. jobs report is likely to be an outside force impacting the grains Friday.

Rains and cold temperatures, including snow, in the U.S. Corn Belt are bullish for corn, which in turn is the leader of the grains complex, at present.

Wheat bulls still have some upside near-term technical momentum on their side. This week’s hard red winter wheat tour showed a U.S. Plains wheat crop in generally bad shape.

Meantime, light farmer selling in the U.S. cash market supports soybean futures prices.

TheCropSite News Desk

IMPORTANT NOTE: I am not a futures broker and do not manage any trading accounts other than my own personal account. It is my goal to point out to you potential trading opportunities. However, it is up to you to: (1) decide when and if you want to initiate any traders and (2) determine the size of any trades you may initiate. Any trades I discuss are hypothetical in nature.

Here is what the Commodity Futures Trading Commission (CFTC) has said about futures trading (and I agree 100%): 1. Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND RISKY BUSINESS. Before you invest any money in futures or options contracts, you should consider your financial experience, goals and financial resources, and know how much you can afford to lose above and beyond your initial payment to a broker. You should understand commodity futures and options contracts and your obligations in entering into those contracts. You should understand your exposure to risk and other aspects of trading by thoroughly reviewing the risk disclosure documents your broker is required to give you.

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