Nasdaq 100 Relaxes After Hitting All-Time High; FOMC Minutes Due Later

Also, 30-year T-bond, silver, natural gas and Japanese yen futures

1. Nasdaq 100 E-mini futures (/NQ): -0.33% 
2. 30-year T-bond futures (/ZB): -0.14% 
3. Silver futures (/SI): -0.77% 
4. Natural gas futures (/NG): +5.69% 
5. Japanese yen futures (/6J): +0.38% 
   

After stretching to fresh closing highs in both the SPX and NDX cash indexes yesterday (likewise both SPY and QQQ closed at record highs), U.S. equities are taking a breather today. A 20-year bond auction later today is an appetizer for the main course that includes the January Federal Open Market Committee (FOMC) meeting minutes, which, like the December minutes, could offer greater insight into the forward path of rates as tariff talk continues to swirl. Elsewhere, natural gas prices continue to surge, while the U.S. dollar is modestly weaker on the session. 

Tariff headlines weighed on market sentiment this morning, with the Nasdaq 100 (/NQH5) dropping by 0.24% in early trading. The Trump administration announced possible tariffs on automobiles and pharmaceutical imports. European markets reacted negatively to the news flow, which spilled into the U.S. session. That will likely remain on investors’ minds for the next few days. The Fed’s minutes from its most recent meeting will be released today, potentially offering clues about the path of rate cuts. Earnings are slowing down, but we still have several notables. Alibaba (BABA) and Walmart (WMT) are set to report later this week.  

The bond market saw yields increase along the middle- and long-ends of the curve today as inflation concerns come back into the fold following President Trump’s latest signals on possible tariffs. The 30-year T-bond futures fell 0.14% in early trading as traders prepare to parse through the Fed’s minutes due out later today. Several Fed speakers on the docket through the rest of the week, with Chicago Fed President Austan Goolsbee scheduled to speak tomorrow.  

Silver prices are trimming some of yesterday’s gains, down today about 0.77% in early trading. The metal remains positive on the week as it trades near the highest levels seen since October, but the threat of tariffs and the possible implications for inflation and the Fed’s rate setting could pose a headwind for the metal through the rest of this week. The price action today could incentivize bulls to take some profits.  

Natural gas futures (/NGH5) continued to rise today as cold air blankets much of the Eastern United States. The arctic blast has pushed well into the south, which has affected production. The latest figures from Bloomberg show U.S. production is just under 102 billion cubic feet per day, well below the 105 billion cubic feet per day (bcf/d) we saw last week. Meanwhile, energy consumption is up as people heat their homes.  

The Japanese yen (/6JH5) benefited from recent comments from Bank of Japan (BOJ) Gov. Kazuo Udea that signaled more rate hikes soon if the economy meets projections. Economic data released earlier this week helped boost the yen and improve sentiment for the currency on the view that the U.S. yield premium vs. Japan will shrink later this year, offering more upside for the currency. Traders need to push prices above the February swing high of 0.006520, which may increase some profit-taking and pose a technical barrier for prices.  

Christopher Vecchio, CFA, tastylive’s head of futures and forex, has been trading for nearly 20 years. He has consulted with multinational firms on FX hedging and lectured at Duke Law School on FX derivatives. Vecchio searches for high-convexity opportunities at the crossroads of macroeconomics and global politics. He hosts Futures Power Hour Monday-Friday and Let Me Explain on Tuesdays, and co-hosts Overtime, Monday-Thursday. @cvecchiofx

Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. #@fxwestwater
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