First Greek Bond Auction stops Euro Advance

After the Greek bailout was agreed the Dow Jones broke through the 11,000 mark as the market took in the news. This is the first time since September 2008 that the Dow has reached this level. This morning the Euro lost some of its momentum as the first auction of $1.2B Greek T-bills was offered. This is specifically designed to test the waters, as there will be a $10B offering next month.

The US$ is mixed in the O/N trading session. Currently it is higher against 8 of the 16 most actively traded currencies in a ‘whippy’ trading range. The USD$ is higher against the GBP -0.09%, and lower against the EUR 0.09%, CHF +0.16%. The commodity currencies are a tad weaker this morning, CAD -0.11% and AUD -0.26%. The market should expect the AUD to remain better bid on any pull backs (0.9267).

Crude is lower in the O/N session ($83.63 down -71c). The black stuff is under pressure after the International Energy Agency raised the supply forecast for Non-OPEC countries (about 60% of world oil production). Last week’s EIA report revealed that crude stocks rose by +2.9m barrels to +354.2m. The market had been expecting an increase of +2.4m. The surprising factor in the report was that gas inventories recorded a modest gain, unlike the previous couple of weeks. Stocks increased +313k barrels to +224.9m w/w vs. a forecasted decline of -1.85m barrels. Other reports showed that OPEC’s crude-oil production slipped from a 14-month high last month. Technical analysts have their eye on $90 by year end.

Commodities prices remain contained despite the strength of the dollar. It is firm in terms of the EUR, GBP and JPY. However, over time the dollar’s direction will be the strongest indicator to wanting the yellow metal or not ($1,154). Platinum and palladium have outperformed Gold as jewelry demand and Chinese auto industry demand have picked up.

The Nikkei closed at 11,161 down -90. The DAX index in Europe was at 6,236 up -14; the FTSE (UK) currently is 5,763 up -13. The early call for the open of key US indices is lower.

Note: Dean will be away traveling for the next two week’s and will return to publication on April 29th.

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