Nasdaq 100 E-minis, 30-Year T-Notes, Gold, Crude Oil and Canadian Dollar Futures

Five futures in focus. Right here, every weekday morning.

1. Nasdaq 100 E-mini futures (/NQ): +0.96%
2. 30-Year T-Note futures (/ZB): -0.31%
3. Gold futures (/SI): -0.36%
4. Crude oil futures (/CL): -0.23%
5. Canadian dollar futures (/6C): -0.09%

Arguably the biggest binary event risk of the week has come to pass, with Nvidia (NVDA) earnings blowing past expectations and providing a lift to U.S. equity markets. Both /ESU3 and /NQU3 surged at the end of the day on yesterday, with opening gaps producing meaningful gains once trading resumed on today. With evidence in hand that the AI narrative may have just received a new lifeline, attention is refocusing tomorrow on the Federal Reserve Jackson Hole Economic Policy Symposium and Fed Chair Jerome Powell’s speech.

What was said yesterday—“the ability of /ESU3 and /NQU3 to maintain turns higher, however, will ride or die with NVDA’s earnings”—has proven true. NVDA accounts for approximately 4% weighting in each of the S&P 500 and the Nasdaq 100, and the stock’s +6.17% gain pre-market has fueled the rally (as well as helping lift other plays in AI).

Yesterday's sharp rallies in the long-end of the U.S. Treasury curve have been met by modest selling pressure thus far today. Once more, the trio of /ZNU3, /ZBU3 and /UBU3 are leading the action, as markets brace for signs from Fed Chair Powell that while another rate hike is possible, rate cuts are certainly nowhere close to being considered. “Higher for longer” doesn’t necessarily mean another rate hike; it could mean the Fed maintains rates at their current level for an extended period. The latest U.S. durable goods orders report reinforced the idea that U.S. growth isn’t slowing down in the near-term.

Gold and silver declined this morning as bond yields and the stronger U.S. dollar pressured traders to sell the precious metals after U.S. jobless claims for the week ending Aug. 19 fell to 230,000 from 240,000. U.S. durable goods orders impressed against expectations when excluding transportation for July. That said, both /GCV3 and /SIU3 have exhibited meaningful technical turnarounds in recent days, suggesting that any weakness presented may be a ‘buy the dip’ opportunity.

Crude oil is little changed despite the larger-than-expected U.S. stockpile draw of 6.1 million barrels for the week ending Aug. 18 that the Energy Information Administration (EIA) reported yesterday. The bullish headline print was likely tempered by rising distillate inventories as the summer season heads toward an end. /CLV3 continues to contend with a potential topping pattern in the form of a head and shoulders, which suggests a potential drop toward 73 over the coming weeks—if initiated.

The U.S. dollar is back on the offensive, following better-than-expected economic data. That underscores the juxtaposition of the North American and European (Eurozone and U.K.) economies. But the one currency proving insulated, perhaps due to its close ties to the U.S., is the Canadian dollar. Among FX futures, /6CU3 has weakened the least, even though the technical structure of the charts (in both /6CU3 and the USD/CAD spot rate) suggest the Canadian dollar may be set on a path toward weakness in the near-term.

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 

For live daily programming, market news and commentary, visit tastylive or the YouTube channels tastylive (for options traders), and tastyliveTrending for stocks, futures, forex & macro.

Trade with a better broker, open a tastytrade account today. tastylive, Inc. and tastytrade, Inc. are separate but affiliated companies.