Written Commentary
STOCK INDEX FUTURES
In retrospect, the equity market showed impressive action last week with a slight revitalization of investment interest and an early measure of hope that the Fed would not hike rates this month. Unfortunately for the bull camp, the nonfarm payroll report reversed last week’s early moderation of rate hike fears leaving the prospects of a hike hanging over the equity markets. Fortunately for the bull camp the stock market held up in the face of a potential outside market inspired selloff and managed 3rd straight higher close. However, with oil prices threatening another upside breakout, geopolitical influences are likely to unsettle investors and thicken overhead resistance on the charts.
CURRENCIES
The action in the dollar over the two previous sessions should be very discouraging to the bull camp as strong US data, increase prospects of a US rate hike and the potential for a return of war premium buying has failed to bring the dollar up at away from last week’s spike down trade. In fact, in the Monday night trade the dollar forged a downside breakout with the lowest trade since August 25th.
TREASURY FUTURES
By almost any measure the August nonfarm payroll report was a blockbuster report especially with back month upward revisions which in turn erased the contraction seen in the initial July release. Historically, a surprise nonfarm payroll report can take a couple trading sessions to fully factor into prices, but it is also clear that treasuries recently have not been responding in kind to schedule data.
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