Daily Analysis – Commodities Tumble, Dollar Gains

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By BinaryOptionStrategy.com

Equities

Markets in Asia closed mostly higher, as the Kospi jumped 1.3%, led higher by LG which surged 7.1%. The ASX 200 gained 1.2%, and the Nikkei advanced .5%. Markets in China fell as the Shanghai Composite eased .3% and the Hang Seng fell .2%.

Inflation data in China showed a slight easing in price rises, as prices rose 5.3% from a year earlier, less than March’s 5.4% increase. Nonetheless, the data was higher than expected.

European markets initially rose, but reversed after US markets turned lower. The FTSE fell .7%, and the DAX eased .1%. The CAC40 rose .1%, as shares in Hermes, a luxury goods company, rallied 3.3% on strong earnings.

The Dow fell 130 points and the S&P dropped 1.1%, as commodities once again tumbled.

Macy’s rose 7.7% after beating analyst estimates, while Disney dropped 5.4% after missing analyst estimates.

Treasuries and Commodities


Bonds rose as equities and commodities fell. The benchmark 10-year note gained 14/32 to yield 3.16% and the 30-year note rose 22/32 to yield 4.31%. A $24 billion auction of 10-year notes had a bid-to-cover ratio of 3 and a high yield of 3.21%.

Energy trading was briefly halted by NYMEX after gasoline prices fell 25 cents, triggering circuit breakers. Gasoline futures closed down 7.2% at 3.1367. A report on gasoline inventories showed a surprise rise in supplies, indicating consumers are limiting consumption due to high prices. US crude fell 4.90 to 98.98, crossing back below $100.
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Gasoline Futures Plummet

Metals were under pressure, as silver tumbled 8.2% to 35.33, and copper plummeted 3.3%. Gold settled down 10.80 at 1506.10.

Agricultural futures posted wide losses, as wheat fell 5%, while corn and sugar fell more than 4% each.

Currencies

The dollar rallied as commodities fell. The Euro tumbled more than 2 cents to 1.4203, and the Australian dollar dropped 1.4% to 1.0692. The Swiss Franc shed .8% and the Yen lost .2%.

Economic Outlook

The US trade gap rose to $48.1 billion in March, more than expected, and well above February’s $45.4 billion. Mortgage application rose 8.2%, thanks to a significant drop in interest rates over the past few weeks.

Thursday’s reports will include PPI, Retails Sales, Business Inventories, and weekly jobless claims.
 
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