Tuesday, March 23, 2010
U.S. equity markets are trading flat this morning but could see downside pressure if investors decide to seek protection against a decline by demanding safety from higher yielding
assets. Yesterday the markets showed how resilient they were when they rebounded from early pressure. Risk of a flare-up of financial problems in Greece could encourage investors to move money out of
higher yielding stocks and commodities.
June Treasury Bonds are expected to open flat to slightly better in light trading. Investors seem unwilling to take a position until they see this week’s auction results. Investors
fear that the higher return in the equity markets will encourage traders to seek higher yields in T-Bonds, thereby driving down prices. Furthermore, some traders feel that the war of words between
the U.S. Treasury and China over currency valuation will lead to less demand from the Chinese.
The stronger Dollar is putting pressure on April Gold. Yesterday the main trend turned to down on the daily chart, signaling weaker markets to follow. Watch for choppy, two-sided
trading while the Dollar tries …
