This just in. There is no recovery in the U.S. This being the end of the March futures contracts on the COMEX the headlines were suitably bearish to ensure a proper sell-off in the metals while the Primary Dealers in the U.S. took down almost 47% of the $35 billion in 5 year notes auctioned off by the U.S. Treasury Dept. on Wednesday. Oh, and don’t worry folks, the U.S. has even more for you to watch get sold back to the Fed immediately in the repo market tomorrow.
To create cover for this action in the commodity pits yet another rumor was floated about releasing supply from the Strategic Petroleum Reserve to put pressure on oil prices, which again could not be pushed below their current 4 week range. West Texas Intermediate Crude for May delivery at $105.47 per barrel. Brent Crude closed at $124.31 per barrel. But that was enough to send the entire commodity complex into a tailspin.
30 year bond prices rose until the results of the auction were known at which point prices faded ending the day nearly flat. The yield on 5 year notes was 1.03%, the highest rate since October at a 7 month low bid-to-cover. I would expect this softness in commodity prices to be short-lived even though there is no meaningful economic recovery in the U.S. In the face of all of this the Dow and the S&P 500 were mostly unmoved.
Gasoline futures did not budge off of $3.40 per gallon.
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