E-mini S&P (June)
Yesterday’s close: Settled at 2839.25, up 9.25
Fundamentals: U.S benchmarks remain under pressure and cooling data from China isn’t helping. The closely watched trio of monthly reads all were below expectations last night; Industrial Production, Fixed Asset Investment and Retail Sales. With trade tensions seemingly at a pinnacle and the landscape solidified, traders and investors were looking for a continued wave of relief from the worst of this pullback. Of course, any fresh headlines on trade will certainly drive sentiment but we expect today to be more about the data than anything else. China did not get things off to a good start and Eurozone GDP was underwhelmingly in line. Next up is April Retail Sales from the U.S along with May NY Empire State Manufacturing at 7:30 am CT. April Industrial Production is due at 8:15 am CT, Fed Governor Quarles speaks at 8:30 am CT and March Business Inventories are out at 9:00 am CT. Traders should keep an eye on weekly Crude Oil inventory data is released at 9:30 am CT. Richmond Fed President Barkin speaks at 11:00 am CT and Treasury Transaction data is due at 3:00 pm CT. Yesterday, Kansas City Fed President and 2019 voting member George advised against cutting rates even with a looming trade war in order to avoid inflating asset bubbles that lead to a recession; look out for Fed speeches to dial in on this theme, who agrees and disagrees.
Technicals: This morning, we find price action right where it was at this time yesterday. The recovery is dissipating after running into and through crucial levels of resistance. In fact, despite extending gains out above major three-star resistance ... Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.
Crude Oil (June)
Yesterday’s close: Settled at 61.78, up 0.74
Fundamentals: Yesterday was a technically and fundamentally constructive session for Crude Oil as it recovered from a sharp and ugly reversal Monday. However, the private API inventory survey and slower Chinese economic numbers have not done the bulls any favors since yesterday’s settlement. Price action was whacked by 1% after API reported a massive build of 8.6 mb of Crude. They also reported a build of 567,000 barrels of Gasoline and 2.2 mb of Distillates. To top things off, inventories at Cushing increased by 2.1 mb. Overall, this report was as bearish as it gets, especially relative to EIA expectations which have been revised to -0.8 mb Crude, -0.299 mb Gasoline, and -1.006 mb Distillates. Yes, analyst expect minor draws across the board. Although these are the expectations, many analysts truly expect builds in tune with API, in other words, the bar has been set. If the data is anywhere in the ballpark of those EIA expectations it would be considered pretty bullish as the market would then see a repositioning.
The IEA released their Monthly Report this morning and most notably said that rising U.S production will ‘fill the gap’ left by Iran and Venezuela. They noted that in April OPEC produced about 440,000 bpd less than the ceiling set with Saudi Arabia leading this push producing 500,000 less. However, they revised their demand forecast lower by 90,000 bpd from last month.
Technicals: Ahead of such fundamental uncertainties with EIA data and another stalled technical push, we have not choice but to be Neutral. We do remain longer-term upbeat given that Crude continues to close above ... Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.
Yesterday’s close: Settled at 1296.3, down 5.5
Fundamentals: Gold is firmed up ahead of U.S hours as the global landscape exuded a higher degree of uncertainty with slower China data and underwhelming growth confirmed in the Eurozone. The Dollar is holding positive and this has kept Gold from extending gains despite a contraction on headline Retail Sales. However, NY Empire State Manufacturing for May was very healthy. We await Industrial Production data at 8:15 am CT, Fed Governor Quarles speaks at 8:30 am CT and March Business Inventories are out at 9:00 am CT. Yesterday, Kansas City Fed President and 2019 voting member George advised against cutting rates even with a looming trade war in order to avoid inflating asset bubbles that lead to a recession; look out for Fed speeches to dial in on this theme, who agrees and disagrees. There is currently a 76.1% probability the Fed cuts rates this year and now a 16.7% probability they do this at their next meeting June 19th. As long as the Dollar does not accelerate today and risk-assets remain under slight pressure at minimum, the landscape should remain favorable for the metal.
Technicals: Gold has struggled to hold out above 1301.5 but on a positive note, major three-star support at ... Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.
Click below to sign up for 1 or all 4 of our daily Blue Line Express commodity reports
Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.