Daily Futures Commentary October 12, 2009

Monday, October 12, 2009

Today is a bank holiday in the U.S. Trading may be thin at times because of the holiday but this condition could lead to volatile trading. There are no major reports from the U.S. today. Tomorrow will be an important day with Retail Sales, Business Inventories and FOMC Minutes.

The main issue in the markets is the Dollar and risk appetite. Last week the Dollar was pounded early as traders were questioning its use as the world’s reserve currency. It made a slight comeback late in the week, boosted by comments from the Fed regarding a tight monetary policy. Overnight, last week’s late positive momentum was erased by a pick-up in demand for risk. Asian and European traders seem positive the Dollar will continue to weaken and are expected to step up demand for higher risk assets throughout the week.

Stronger stock markets in Asia and Euro are expected to drive U.S. stock markets higher today. Traders seem fearless about earnings. Buying is coming in strong despite having a majority of companies left to report third quarter results. Overnight the December E-mini S&P 500 reached a new high …
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