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Financials: Sept. Bonds. Are currently (5:00am) at 179’31 up 0’8, 10 Yr. Notes up 0’1 at 139’12 and 5Yr.Notes unchanged at 125’24. Yields are little changed from a week ago with the 2yr. At 0.15%, the 5 yr. at 0.28%, the 10 yr. at 0.62% and the 30 yr. at 1.32%. As predicted a few weeks ago the yield curve continues to flatten as the spread between the 2 and 10 yr. has narrowed from 57basis points to this morning,s 47 points. Perceived dollar weakness and equity markets and the prospect of more economic stimuli should provide continued buying for the short end of the yield curve. I still feel the 2 Yr. Note will go negative if the dollar and equities continue to show weakness.
Grains: Dec. Corn is at 347’2 up 2’6, Sept. Beans 3’4 higher at 884’2 and Sept. Wheat down 0’4 at 550’2. I still feel the grains are a buy on sharp breaks given the acreage report 2 weeks ago and the 30 cent break in Corn from recent highs and the consequential 20 cent rally.
Cattle: Live and Feeder Cattle continue to rally on reported good demand despite declining boxed beef prices and the spread between choice and select grades of beef continuing to widen. I remain short Feeder Cattle.
Silver: Sept. Silver is 16 cents lower at 19.60. For the moment the trend remains up as the market holds the 19.05 level. A weak dollar this market and dropping interest rates have propelled the this market to current levels. I feel Silver is over bought and subject to sharp breaks.
S&P’s: The market is currently down 25.50 at 3194.00. The market remains dominated by a handful of tech stocks and seems overall rather frothy. Treat as a trading affair and keep an eye on “FANG” stocks.
Currencies: As of this writing the Sept Euro is down 20 at 1.14015, the Yen down 17 points at 0.93900, the Pound down 58 at 1.2528 and the Dollar Index down 21 points. I still like the long side of the Euro and the Pound and the short side of the Dollar Index.
That being said, we have been in these position for quite some time and I recommend using close stops.
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