China trade data disappoints, Equities lower, Bonds higher on flight to safety

Financials: June Bonds are currently 1’11 higher at 163’21, 10 Yr. Notes 15 higher at 129’12.5 and 5 Yr. Notes 8 higher at 120’05.7. June 2017 Eurodollars are 4.5 higher at 98.97. We have cdovered our short Eurodollar June 2017 positions and are currently on the sidelines. China’s export figures were sharply below expectations at $34 Billion adding more indication of slowing growth. Equities dropped and treasuries rallied on the news. I am still favoring the long side of the 10 Yr. Note on breaks to the 128’00 area. If you can recall that earlier in the year it was tauted that being short the German 10 Yr. Bund could be the trade of the year, it may be time to revisit this idea. We did well being short this market, taking profits on a break to the 157.00 level from a trade initiated at 162.00. I will be looking at the short side of June Bunds above 167.00. I will also be reinstating short June c2017 Eurodollars above the 99.10 level should they rally.

Grains: May Corn is currently 1’2 lower at 357’6, Beans 3’0 lower at 879’2 and Wheat 2’2 lower at 460’0. We have been on the sidelines but will start paying attention to the grains as planting intention info starts hitting the market in the next few weeks.

Cattle: Live and Feeder Cattle have been somewhat rangebound over the last few sessions, however, charts indicate they may be trending lower. We have been spread short Apr./long June or Aug. (last Friday I recommended taking partial profits if you are holding multiple positions). I still like this trade and anticipate further narrowing of the spreads as long only index funds roll long Apr. positions into deferred contracts in the coming weeks.

Silver: Apr. Gold is currently 10.00 higher at 1275.00 and May Silver 1 cent higher at 15.64. Gold is currently in resistance and I once again recommend taking partial profits if you are long multiple contracts. Resistance in Silver is currently 15.80. Time to roll Apr. GD into June contracts.

S&P's: Mar. S&P’s are currently 11.00 lower at 1988.00. Once again the market is below the 200 day moving average (1995.50) having traded as high as 2005.00, but not significantly breeching this number. We are short with an initial risk of the 2013.00 level. A close below 1984.00 will give us reason to lower our stop to the 1994.00 level. Support is currently 1968.00. Next week we will be trading June contracts.

Currencies: As of this writing the June Euro is currently 12 higher at 1.1030, the Yen 16 higher at 0.8872, the Pound 58 lower at 1.4210 and the Dollar Index 1.5 lower at 97.12. I am a seller on rallies in the Dollar Indexc and a buyer on breaks in the Yen.

We remain long Natural Gas, currently at a loss, but feel encouraged by the recent bounce off of the 20+ year lows.