Commodity prices are moving lower overnight as the US dollar pushes broadly higher, applying de-facto downward pressure to assets denominated in terms of the benchmark currency. While single catalyst for the advance is not readily apparent, a pickup in haven demand for the greenback seems reasonable as traders cast a worried eye toward the week ahead. The third-quarter corporate earnings reporting season gathers pace over the coming days – 84 members of the S&P 500 are due to release results – and traders appear increasingly concerned that companies’ guidance will point to a deepening slowdown in global growth.
Citigroup Inc. headlines today’s earnings docket. The earnings of large financial institutions may prove particularly telling in revealing the discrete and overlapping implications of economic and financial vulnerabilities plaguing the global outlook. With that in mind, traders will be keen to see not how the third-largest US bank faired over the past three months and where it sees its fortunes heading from here. On the data front, the spotlight is on September’s US Retail Sales data and October’s Empire Manufacturing survey of New York State factory-sector activity. Positive outcomes are likely to prove supportive for risk appetite (and by extension for key commodities), buoying hopes that a firmer US recovery will help offset sluggish performance elsewhere, and vice versa.
Comex E-Mini Copper (NY Close): $3.704 // -0.048 // -1.28%
Prices edged through support at 3.707, the 23.6% Fibonacci retracement, to test the bottom of a falling channel set from mid-September. A push below this boundary targets the 38.2% level at 3.627. The 3.707 mark has been recast as near-term resistance, with a break above that aiming for the channel top at 3.802.
WTI Crude Oil (NY Close): $91.86 // -0.21 // -0.23%
Prices are testing resistance at the would-be neckline of an inverse Head and Shoulders bottom (92.50), with a break higher implying a measured upside target at 97.96. Support stands at 87.66, the 38.2% Fibonacci retracement. A drop below that targets the 50% level at 83.76.