Today is all about speeches from the heads of the major central banks. US and Canadian data comes out at 8:30 AM ET.
4:15 AM ET Mario Draghi
7:00 AM ET Mark Carney
9:30 AM ET Mark Carney
9:30 AM ET Kuroda
9:30 AM ET Mario Draghi
1:00 PM ET Janet Yellen
I'm really not expecting them to say anything new, but you never know. Either way, the forex markets will be listening for any clues to their next move. After a strong start to the week, the US Dollar (UUP) has paused waiting for news to determine direction.
The strongest market right now in the forex markets is the British Pound (FXB). British retail sales gained 1.2% and are 4.7% higher than they were a year ago. This is good news for the British economy and the Pound. I'm expecting the British Pound to continue trending higher.
The S&P 500 (SPY) looks set to make new highs. As I said yesterday, the bull trend in the US stock market is too strong and trying to short is too risky. Every dip has been a buying opportunity. Unless traders book profits before the long weekend, I expect the S&P 500 to end the week on a high note. Volume should be light as most traders head out for Memorial Day.
As I said yesterday as well, Treasury Bonds (TLT) have found support this week and bounced yesterday. The bond market appears to be paying attention to weaker US economic data and the likelihood that a rate hike isn't imminent. Sales of previously owned homes fell 3.3% in April and a weaker Philly Fed Survey contributed to bond buying.
Commodities
WTI (USO) and Brent (BNO) rallied on the back of stronger gas (UGA) prices. The summer driving season is about to start and RBOB Gasoline futures have risen from $2 on Tuesday to $2.08. Gasoline prices typically rally in the spring and this year was no exception.
The other factor that helped oil prices was the dollar's rally slowed down. Because of this, the oil market was able to extend Wednesday's gains after supplies dropped more than expected.
Natural Gas (UNG) prices rose after inventories rose by 92 bcf, which was less than the 97 bcf the market had anticipated. However, it's still not enough to get me bullish on this market.
The Gold (GLD) market is stuck between a rock and a hard place. It held the critical $1200 level early in the week. To me, it's been a boring market with no clear direction. The dips have been bought and the rallies been sold.
I said yesterday that the market I was watching the Wheat (WEAT) market. Boy was I right as Wheat rallied. Rainfall in the central and southern Plains has forecasters concerned that too much moisture could damage the crop. In Russia and parts of Canada, it's dryness that has forecasters concerned.
Corn (CORN) prices are trying to rebound while Soybeans (SOYB) made new overnight lows. I'm on the sidelines in both markets.
Bottom line
I expect to see position squaring ahead of the long weekend. Volume will be rather light, which could create some wild swings. As always, good luck and happy trading!