Initial Jobless Claims came in higher than estimates, and the Philly Fed Manufacturing numbers are stronger than anticipated. Precious metals are higher, and stocks battle positive territory.
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Good afternoon, traders. It’s Chris Chavez with Blue Line Futures and it’s your daily midday market minute. We’re seeing a pop here in treasuries and precious metals are moving higher. But before we get to it, if you’re watching this video like it, subscribe if you’re on our website. There’s also a link to direct you to YouTube and you can subscribe that way.
We would love for you to follow us. We would love for you to help us build our following. Yeah. Looking at the Treasury market here today, we’re seeing a nice relief rally. You know, yields are coming off of their highs. I want to touch base on the CME Fed watch tool is interest rate expectations have been moved from June to May, especially with a lot of this data that we’ve been seeing here as of late.
You know, we had CPI no inflation for the month of October. PBI producer prices came in deflationary for the month of October. We’re seeing that repricing take effect in the bond market here. We’re looking at the May month for interest rate expectations using the CME Fed watch tool. There is a 50% chance that we will cut or the Fed will cut by 25 basis points.
There is a 20% chance that the Fed’s going to cut by 50 basis points. So the way that I like to look at that is really you take those two together, there is, you know, more than a 70% probability that we’re going to see 25 basis points or more of cuts looking at the month of May. So, you know, really going to going to play out in this environment.
I think, you know, you’re seeing a little bit of weakness here in the labor market. We did just get initial jobless claims here this morning, which is one potential reason why you’re seeing yields, you know, off of their highs. And, you know, initial jobless claims came in above estimates. So you’re seeing it’s looking like, you know, the labor market is starting to slow down just a little bit.
Precious metals are in positive territory here today as stock indices are really trying to grind higher. Know, I think you’re seeing a little bit of consolidation, probably waiting for a bit more confirmation next week. We are going to have new treasury issuance coming to the market again, more bond auctions. So some potential headwinds still with yields in the rate environment and you know how it’s going to impact risk assets.
But it definitely seems like the precious metals are really responding to jobs data, you know, nonfarm payrolls, you know, initial jobless claims, ADP, things like that are really what’s providing more relief and what the metals tend to respond to is maybe more of a flight to safety trade more than anything. So tomorrow we’re going to get eurozone CPI.
So inflation data coming out of the eurozone tomorrow. Also get some housing data building permits and housing starts a little bit more to finish out the week that we could pay attention to, we’ll get some of these major support and resistance levels again for the S&P. You’re going to want to keep an eye on a major four star level of 4555.
We haven’t been able to break above there just yet, but if we do, that’s really, I would say, one of the last levels before we can try to retest 52 week highs. Looking at the Nasdaq, you know, on the same token, major four star is going to beat that 16, 18 to 1663 level break, close above the top end of that range.
That 1663 again, I think is really going to be that last bit. We need to try and push towards those 52 week highs or we would really be right there. So you’re gonna want to pay attention to that crude options today on the December WTI crude contract expire at 130 Central Time. So, you know, sometimes after we go through this little expiration with those crude options, we can see a little bit more volatility in the crude market.
Could open some door, the door for stabilization. But as we’re seeing this real sharp move lower in crude here today, I think, you know, we could see a little bit more volatility potentially. And I want to pay attention to the psychologically significant, you know, $70. You know, really first love is going to be 73 After that, 70 to 50, then down at that $70 range where we were consolidating in the summer.
And gold, as we’re seeing this popular today, major resistance, 1991 and 2/10 to 2001, we break above that psychologically significant 2000 handle. I think we’re going to be off to the races to try and retest some of those previous highs set in the earlier part of the year. If you have any questions, reach out to our trade desk.
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