Ahead of NFP + Futures Trading Levels for 03.06.2024

Bullet Points, Highlights, Announcements

Heads up: 

Keep an eye out for Friday (7:30 A.M., Central Time) for the release of the monthly Non-farm Payrolls report by the Labor Department.  It’s widely considered to be one of the most important and influential measures of the U.S. economy.

To review, the Labor Dept.’s Bureau of Labor Statistics surveys about 141,000 businesses and government agencies, representing approximately 486,000 individual work sites.  The report excludes farm workers, private household employees, domestic household workers and non-profit organization employees.  The report also includes other detailed industry data including the overall unemployment rate as a percentage of the total labor force that is unemployed but actively seeking work, wages, wage growth and average workday hours.

General:  

It was truly an historical day yesterday.  Both the decades-old 100-oz gold futures contract and the seven-year-old Bitcoin futures contracts traded up to all-time highs.  Apart from any of the stock index futures contracts, rarely do we see simultaneous all-time highs for futures contracts.  April gold touched $2,150.50 per ounce (and is trading at new all-time highs again today), while the March Bitcoin futures hit 70,195 – before a significant ±10,000-point sell-off in a span of four hours around mid-session.

But wait, there’s more!  May cocoa traded up to its own all-time high yesterday as well, hitting $6,660/metric ton intra-day.  This is a ±$26,000 move for cocoa in a little more than two months, having closed at $4,048 on Jan. 8.

Three consecutive all-time highs in futures: gold, Bitcoin and cocoa.  Oh my!

Energy:  

Managing Director and Global Head of Commodity Strategy at Royal Bank of Canada’s Capital Markets Division.  That’s quite a title and it’s how Helima Croft’s business card reads.  She’s well regarded as a specialist in geopolitics and energy and along with her team of commodity strategists who cover energy and metals are seeing signs of the higher supply/lower demand imbalance in crude oil tipping in the other direction.  This is a macro prediction and not forecasting any sort of breakneck move to $100/barrel and it rests in part on the view that the U.S. will be unable to replicate its “blockbuster” output of 2023.  It also anticipates OPEC+ will look to press on with its aggressive production cuts having already committed to extending its 2.2 million barrel-a-day production cut through June.  The projection also sees the conflict in the Middle East as instilling a risk premium in energy prices that isn’t going away soon and may increase if the region sees a spread of hostilities.

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Daily Levels for March 7th, 2024

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* This is not a solicitation of any order to buy or sell, but a current market view provided by Cannon Trading Inc. Any statement of facts here in contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor they purport to be complete. No responsibility is assumed with respect to any such statement or with respect to any expression of opinion herein contained. Readers are urged to exercise their own judgement in trading.