Currencies: Long term trend is up on the Yen

Financials: As of this writing (7:00am) Dec. Bonds are 3 higher at 163’27, 10 Year Notes 3.5 lower at 132’28 and 5 Year Notes 2.5 lower at 123’05.75.Yesterday the FMOC unanimously left interest rates unchanged. Where they differed was on when to start slowing the pace (tapering) of the current 120 Billion dollar Bond and mortgage backed security purchases. Some thought later this year, some in 2022. Also discussed was the possibility of a 2022 rate hike, also mentioned was inflation being transitorily higher than expectations. Chairman Powell also postulated that the unemployment rate should come down to 3.5% from the current 4.8%. The market reaction was a slight flattening of the yield curve as the 2 and 5 year notes gained 1-4 basis points in yield over the 10 year notes and 30 year bond. Technically the Bonds tested and held resistance at 164’15. Support is now 161’24.

Grains: Dec. Corn is 2’0 lower at 523’4, down 13’0 for the week. Nov. Beans are 2’6 higher at 1285’6 down 14’0 for the week. Support on Dec. Corn remains in the 502-512 levels and resistance in the 540’0 area. Support for Nov. Beans remains at 1268’0 and resistance has been lowered to 1318’0.

Cattle: Oct. LC closed up 82 at 123.27, down 90 for the week. Oct. FC closed up 105 at 157.67, up 17 for the week. Early estimates for Friday’s Cattle on Feed Report are as follows: on feed 97.9%, placements anywhere from 93.7-103 (I feel placements will be closer to the lower end of the guesstimates range) and marketing unchanged (100%). Support remains and was tested at 122.10 for Oct. LC and resistance remains at 125.85.

Silver: Dec. Silver is 18 cents lower at 22.72, down 40 cents for the week. Too volatile for me to trade. Think options.

S&P: Dec. S&P’s are 25.00 higher at 4409.00 but down 53.00 for the week. This market sold off dramatically early in the week to 4293.00 as the market feared a loan default buy Evergrande, a Chinese real estate developer, which has 300B of debt to service. They are reportedly over leveraged (shocking!).

The recovery from the lows seems to that some believe a government bail out will ensue. Others are worried about contagion (other firms could default). Support is 4321.00 and Resistance 4424.00.

Currencies: The Dec. Euro is currently 34 higher at 1.1740, the Yen19 lower at 0.9088, the Pound 105 higher at1.3731 and the Dollar Index35 lower at 93.11. Long term trend is up on the Yen, short term trend is sideways.