S&P 500 futures are losing some ground in premarket trading as traders continue to take profits near all-time high levels.
Yesterday, the yield of 10-year Treasuries made an attempt to settle above August highs at 1.38% but failed to develop sufficient upside momentum and pulled back. Today, the yield of 10-year Treasuries managed to get below 1.35% as traders bought U.S. government bonds after yesterday’s sell-off.
The recent moves in the U.S. government bond market show that traders are a bit nervous as they try to guess whether the Fed is ready to announce the reduction of its asset purchase program.
In this environment, trading may remain choppy while traders wait for the new data on the job market which will be released tomorrow.
WTI Oil Rebounds As Traders Shrug Off Worries About Asian Demand
WTI oil has recently managed to get back above the $69 level as traders ignored worries about Saudi Arabia’s decision to cut prices for Asian customers and focused on demand recovery elsewhere.
Today, oil traders will have a chance to take a look at API Crude Oil Stock Change report which is expected to show that crude inventories declined by 3.83 million barrels. In case the report exceeds analyst expectations, WTI oil may get more support and get to the test of the psychologically important $70 level which will be bullish for oil-related stocks.
U.S. Dollar Stays Strong
U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, has recently managed to settle above the 50 EMA near 92.40 and is testing the next resistance level at the 20 EMA at 92.60.
Interestingly, this move did not put pressure on gold which has recently managed to get back to the $1800 level. This move may provide some support to gold mining stocks although it remains to be seen whether traders will be ready to bet on this segment after gold’s recent move below the key support at $1800.