What to Make of Powell's Visit to Congress?
Posted: June 20, 2023, 9:03 a.m.
Our daily research overs the S&P, NQ, Crude Oil, Gold, Silver, Currencies, Corn, Soybeans, Wheat, Livestock, and Softs markets.
Went out to brokerage clients before the bell
- Another big week for central banks ahead:
- The People's Bank of China cut two key lending rates by 10bps last night, as expected.
- Minutes from the Reserve Bank of Australia’s surprise rate hike on June 6th show less likeliness of continued hikes.
- Today, no significant comments on monetary policy from St. Louis Fed President Bullard at a presentation in Barcelona.
- NY Fed President Williams is due to speak at 10:45 am CT.
- Minutes from last week’s Bank of Japan meeting are due tonight at 6:50 pm CT.
- Fed Chair Powell begins a two-day Congressional testimony tomorrow at 9:00 am CT.
- Tomorrow also brings comments from Fed Governors Jefferson and Cook, as well as Chicago Fed President Goolsbee, a 2023 voter, and Cleveland Fed President Mester, a 2024 voter, among other central bank chatter from the ECB and BoJ.
- The Bank of England holds a policy decision Thursday morning, on the heels of inflation data Wednesday morning.
- Housing Starts for May blew the doors off +21.7 m/m versus -0.8% expected, though April was revised lower. Building Permits were also strong +5.2% m/m.
- Much has been made about Secretary of State Blinken’s comments that the U.S. does not support Taiwan's independence. Yes, this aligns with the ongoing narrative, “the U.S. remains opposed to any unilateral changes to the status quo by either side.”
E-mini S&P (September) / E-mini NQ (September)
S&P, last week’s close: Settled at 4453.75, down 17.50 on Friday and up 105.00 on the week
NQ, last week’s close: Settled at 15,268.00, down 106.00 on Friday and up 532.25 on the week
E-mini S&P and E-mini NQ futures softened into the close Friday and have had a choppy start to the week through the holiday session. Last week certainly exuded both short-covering and long-chasing, and it is not uncommon to see price action retreat after such a capitulation. The move also occurred through quadruple witching, highlighted by the expiration of tremendous open interest in both futures and securities options. We will introduce a fresh Neutral Bias, and believe the bears have an opportunity to gain near-term control while price action holds below major three-star resistance at...
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Crude Oil (August)
Last week’s close: Settled at 71.93, up 1.12 on Friday and 1.60 on the week
Crude Oil had a strong finish last week but has struggled to carry higher through holiday trading hours. Price action has been tepid despite the PBOC’s rate cuts, as strong overhead resistance has kept rally attempts in check. We will look for a potential floor defining last week’s late strength at major three-star resistance at...
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Gold (August) / Silver (July)
Gold, last week’s close: Settled at 1971.2, up 0.5 on Friday and down 6.0 on the week
Silver, last week’s close: Settled at 24.126, up 0.179 on Friday and down 0.284 on the week
Gold and Silver futures are under significant pressure this morning. Although the tape has been somewhat soft, despite a strong session on Thursday, the blowout Housing Starts data this morning at +21.7% m/m stuck a knife in them. The strong data comes ahead of Fed Chair Powell's two-day Congressional testimony. Price action is now retesting into last Thursday’s early rally and the bulls must respond to these levels of significant support, with the first wave being...
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Silver (July)
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