Markets finally wake up to the realization that the Fed is serious about raising rates

Financials: March Bonds are currently 14 lower at 155’30. 10 Year Notes 6.5 lower at 128’20.5 and 5 Year Notes 4.75 lower at 119’31.00. Since my last “Report” (12/23/2021) Bonds have dropped 5’09 points breaking sharply once the 160’00 level was breached. My impression is that the market finally woke up to the realization that the Fed is serious about raising rates this year. Yesterday’s release of the FMOC minutes confirms that and even more. We can expect some trimming of the Fed’s inventory of Bonds purchased during quantitative easing once the “tapering” is finished. Yields have risen on the 2 Year Notes to 0.86%, the 5 Year to 1.46%, the 10 Year Note to .73% and the 30 Year to 2.13%. Long-term support is the 153’00 level for March Bonds.

Grains: March Corn is 1’2 lower at 601’0 and March Beans 13’2 lower at 1381’4. These markets remain volatile because of S. American dry weather. Trends remain sideways to up. That being said they are near resistance of 610’0 in Corn and 1400’0 in Beans.

Cattle: Feb. LC closed yesterday at 137.25 down from recent highs above the 140.00 level. I still suspect that packers are carrying too much excess inventory and this will eventually lay on the market. Support is currently 135.90.

Silver: March Silver is currently $1.13 lower at 22.04. I am still looking for a retest of recent lows in the 21.50 area.

S&P: March S&P’s are 13.00 higher at 4705.00. The market tumbled yesterday as the reading of the FMOC minutes revealed a more hawkish Fed on rates than anticipated. Trend may have turned down. We will be watching for a test of the overnight low of 4668.00.

Currency: The March Dollar Index is 2 higher at 96.200. Trend remains up with resistance in the 96.40-96.50 area.