Originally published by Rivkin Securities
US stock markets had yet another quiet session with both the Dow Jones and S&P 500 closing almost unchanged. The CBOE Volatility Index, which measures volatility on the S&P500, is very close to its lows for the year to date which is consistent with our observations that the S&P500 has had very few large daily moves over the past month.
Gold spiked lower yesterday evening as $2bn worth of contracts were sold within the space of a minute. This caused an immediate $10 drop in the price, which didn’t recover and closed down US$12.60. The cause was initially speculated to be a ‘fat finger’ trade where a trader accidentally enters the wrong order (such as putting an extra zero on the end of the order size) but it’s also possible that it was a legitimate trade.
Oil may have found a bottom for now as the price has trended gradually upward for the last week. WTI oil is trading just $1 off its recent lows and traders are clearly cautious with the rally so far having no real steam behind it. Speculators have reduced their net long positions in oil to year to date lows indicating that sentiment is highly bearish but also perhaps that all of the heavy selling is now done.
US durable goods orders for May were released last night with the month over month change coming in at 0.1%, weaker than the 0.4% expected. This follows on from a weak April which saw a decline of 0.5% month over month. Durable goods are expensive items that last more than three years and can be seen as a leading indicator of economic activity. This is because businesses only invest in expensive equipment when they fell the prospects for the economy are good.
While there are no scheduled significant economic data releases today there are speeches from four different central bank figures, ECB president Draghi, BOE Governor Carney, RBA assistant Governor Debelle and finally, Fed Chair Yellen.
ASX futures are pointing to a flat open this morning.
Data releases:
- No Significant Data