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A report showing that U.S. Pending Sales of Existing Homes rose in June for the fifth straight month helped turn around September Treasury Bonds and September Treasury Notes. Both of these contracts were called better on the opening because of slow demand for high yielding assets, but were unable to sustain their gains following the release of the report.
Stock index futures are now higher for the day following a weaker opening. Better than expected U.S. Pending Sales of Existing Homes helped support the equities after another report showed U.S. Personal Income fell by 1.3% in June. The inability of the September E-mini S&P 500 to take out its overnight low at 992.00 helped contribute to the turnaround. Even though some analysts are calling equity futures overbought, the large amount of money on the sidelines seems to be continually fueling the rally on breaks.
The U.S. Dollar is trading mixed. Overnight it looked as if the Dollar was in a position to post a strong gain on the day, but better than expected U.S. economic reports helped to weaken the Dollar against a few currencies at the midsession. Choppy trading is being exhibited by the September British Pound and September Euro as traders seem a little hesitant to add to bullish positions ahead of Thursday central bank meetings. The British Pound did touch 1.70 briefly but was quickly met by selling pressure. Mixed results in the equity markets and crude oil are leading to choppy, two-sided trading in the September Canadian Dollar.
Thin market conditions and the downturn in the Dollar helped December Gold and September Silver recover from earlier weakness. Although it looks as if the Dollar may experience short periods of weakness, the overall trend is down which should help the precious metals strengthen over the short-term.
The turnaround in the equity markets helped September Crude Oil recover from a lower opening. Better than expected U.S. economic reports are once again leading speculators to believe that a recovery in the U.S. economy will lead to greater demand for energy products.