Focus is now on upcoming “sequester” of US budget that will take place automatically in less that 2 hours when midnight comes to New York. Cuts are estimated in $1.2T over US Federal spending for the coming 9 years, according to WSJ MarketWatch, which could represent up to -0.5% of GDP this year, based on CBO’s estimates, and it would be not too good for commodities. "We think investor focus will be on the sequester", said analyst at INTL FC Stone Edward Meir, as cited by Barani Krishnan for Reuters.
USD meanwhile went higher, as usually does with commodities lower, or better said, with USD higher, commodities usually go lower, as a USD higher is interpreted as a non inflationary sign, linked with US yields also higher, and seen as well as a safe haven for capital flows. USD index was +0.43% higher at the NY close, limited so far below the 82.00 figure and key 61.8% Fibo retrace of 84/78.5 leg down, while US 10 year bond yields have been steady around the 1.89% level, right below its 50 day SMA.
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