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Stocks in Consolidation after Strong Rally. US CPI in Focus Print E-mail
ONG Focus | Insights | Written by Oil N' Gold | Tue Mar 13 18 01:17 ET

Stock market was in consolidative mode following the strong rally as a result of the strong US nonfarm payrolls data. Shares in Asia were modestly lower, carrying forward the sentiment in the Wall Street with the DJIA and S&P 500 indices +0.62% and -0.13% lower, respectively. US dollar weakened against the major currencies. Note that Japanese yen jumped as more information about the Morimoto school land sale scandal was revealed. The case involved the sale of public land to the school, with an attempt by officials to cover-up the school's connections with PM Abe's wife. In the commodity sector, oil prices fell across the board. The front-month WTI crude oil and Brent crude contracts dropped -1.1% and -0.82% respectively. Precious metals also weakened. The benchmark Comex gold and silver contracts were down -0.23% and -0.45% respectively.

The focus of today is US inflation report. Headline CPI probably accelerated to +2.2% y/y in February, from +2.1% a month ago. Core CPI probably stayed unchanged at +1.8% during the month. At the employment report released last Friday, US average wage growth slowed to +0.1% m/m in February from +0.3% in the prior month. This came in weaker than consensus of +0.2%. The wage growth result pared expectations that inflation would accelerate in the near future.

For the week ahead, SNB meeting would be held Thursday. The sight deposit rate would stay unchanged at -0.75%. Policymakers should likely maintain the pledge that it would intervene into the market to prevent the franc from excessive strength. Yet, they would be less concerned as the currency has been trading in the lowest level against the euro in three years.

Commitments of Traders:

With the exception of natural gas, speculators were bearish over the energy complex in the week ended March 6. Net LENGTH for crude oil futures declined -17 597 contracts from a week ago to 686 507. NET LENGTH of heating oil dropped -3 296 contracts to 18 623 while net LENGTH for gasoline fell -2 197 contracts to 79 603. Net SHORT for natural gas declined -13 306 contracts to 117 587 for the week.

Speculators were mixed over the precious metal complex last week. Net LENGTH for gold increased +5 105 contracts to 183 823, while that for silver futures revered back to net LENGTH of 6 186 contracts for the week. For PGMs, net LENGTH for platinum slipped -6 110 contracts to 35 641 while that for palladium declined -2 688 contracts to 14 295.


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