All Eyes On The Bank Of Japan
Markets are waiting for the conclusion of the Bank of Japan’s 2 day policy meeting today. Expectations are for the Bank to institute $111 billion in new stimulus measures. Prime Minister Shinzo Abe is said to be pressuring the Bank to do more to bring Japan out of deflation. If the Bank does more than $111 billion in stimulus, it can weaken the yen further and boost stocks. If the Bank comes in at expectations or less than expected, look for the yen to strengthen and stocks to sell off. Most Asian stock markets are unchanged ahead of the announcement.
Gold Approaching Critical $1700 Level
Gold is rallying ahead of the BOJ announcement. Gold priced in yen has been on an absolute tear making new all-time highs. More stimulus by Central Banks increases the demand for precious metals.
Gold has also been moving higher as traders are nervous over the US debt ceiling amid signs that US lawmakers will fail to reach a deal to raise the limit. Republican lawmakers want spending cuts from President Obama and he has not signalled that he’s willing to cut any programs. Gold is currently trading at $1691.90, up $4.90, silver at $32.01, up 7 cents, platinum at $1687, up $13.00, palladium at $718.10, down $4.65, and copper at $3.693, up 14 cents.
US Drought Continues To Boost Grain Prices
Grain prices are higher again after the long weekend as the drought in the US looks set to continue. There’s no rain in sight for winter wheat. If rain doesn’t materialize, an already tight market will become even tighter further boosting prices.
Futures for March delivery on the Chicago Board of Trade for corn, wheat and soybeans are all higher. Corn is at $7.3375 a bushel, up 6 and a quarter cents, wheat is at $7.9850, up 7 and a quarter cents, and soybeans are at $14.41 a bushel, up 11 and three quarter cents.
The sentiment in the grain markets is decidedly bullish and I recommend traders to play the long side of the market. Wheat looks set to challenge the psychological $8 level to start the week and I advise traders to pay close attention to this level. The drought in the US is a fundamentally bullish event that looks set to continue.
US Markets All Near Multi-Year Highs
As earnings season in the US looks set to kick into high gear, traders are focused on whether the rally in stocks can continue. Google reports its earnings today and Apple reports on Wednesday. These 2 events can make or break the rally. Binary traders need to pay close attention to these earnings announcements and trade accordingly. If earnings are better than expected, look for stocks to rally. If the earnings disappoint or come in at expectations, look for traders to book profits and the markets to sell off.
The S&P 500 Index is closing in on the critical 1500 level. Currently S&P 500 futures are at 1482.25, up 3.75, Dow Jones Futures are at 13596, up 20 points, and NASDAQ futures are at 2742.50, up 8.75 points.
Be sure to check back for the latest update after the Bank of Japan announcement!