The market finally realized that current inflation is more than transitory – Rate hikes are expected

Marc Nemenoff PRICE Futures Group

Financials: March Bonds are 5 lower at 154’12, down 1’26 for the week. 10 Year Notes 2 higher at 127’23, down 0’26 for the week and the 5 Year Note unchanged overnight at 113’06.5. Over the last week we saw a test of the 153’00 area as the market made a low of 153’07.What is surprising is that this most recent break in the Bonds is being contributed to the market finally realized that current inflation is more than transitory and more than one rate hike is expected beginning with this March. Yields once again crept higher with the 2 Yr. at 1.03%, the 5 Yr. at 1.62%, the 10 Tr.at 1.83% and the 30 Yr. Bond at 2.15%. Support remains in the 153’00 area.

Grains: March Corn is 2’2 lower at 608’4 and March Beans6’2 higher at 1397’2. Weather in S. America still a factor as theses markets have showed increased volatility breaking whenever it rains and rallying when it doesn’t. Rumored export demand is helping to keep trends sideways to higher. Support for March Corn is 586”0 and Resistance 617’0. Support for March Beans is 1338’0 and Resistance1415’0.

Cattle: Feb. LC is currently unchanged at 138.55, up 200 points for the week. Near term trend is sideways with Support at 137.50 and Resistance at 139.15.

Silver: Mar. Silver is currently 23 cents higher at 24.46, up 1.20 for the week. Near term trend remains up.

S&P 500: Mar S&P’s are 37.00 higher at 4561.25. The market is well below last weeks support of 4692.00 as the market now expects 3-4 rate hikes this year. Long term Support is the 4490.00 area.

Dollar: The March Dollar Index is about unchanged at 95.510. Support is 94.75 and resistance 95.70. Short term trend remains down.

Author

Marc Nemenoff

PRICE Futures Group

Mr. Nemenoff is a 37-year veteran of the futures industry.

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