RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Good morning,

Commodities: Our Bloomberg Indexes have worked phenomenally since we began our commodity allocation back in June 2020.  +31% in that time frame, and +45% from its cycle bottom in March. Most commodities on my radar are now signaling immediate OB, so lets start de-grossing that position, so we can reallocate on the pull-backs to the low end of the range. 

Yield Curve: the steepening of the yield curve (2s/10s) has officially gone mainstream. Same thing, not a bad idea to curtail that position (but leave the core short), so we can reallocate from more advantageous prices. I’m still of the opinion/forecast that this is likely just the beginning of the move up in the 30s and 10s.  The Fed is “in it to win it” in terms of stoking inflation, and they really did say that (in it to win it), and they believe when the time comes, they’ll be able to curb inflation pressures. Until then, keep feasting on commodities and shorting bonds from extremes of our ranges below. 

US Dollar–  down -0.36% this morning, but giving me an interesting signal. On the last move higher to the top of our range, the momentum shifted to positive. So now on the pull back to the low end of our range, the dollar is signaling immediate-term OS, with positive momentum, BUT remains BEARISH trend. But it’s worth noting that something may be changing in the USD over the immediate/intermediate term.  Interesting – watch the Dollar here is all. 

Good Luck.

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