Nasdaq 100 Holds Gains, Bonds Rally Ahead of Treasury Auctions

Also, five-year T-note, gold, natural gas, and Australian dollar futures 

1. Nasdaq 100 E-mini futures (/NQ): +0.03% 

2. Five-year T-note futures (/ZF): +0.10% 

3. Gold futures (/GC): -0.10% 

4. Natural Gas futures (/NG): -1.05% 

5. Australian Dollar futures (/6A): -0.06% 

Equity futures traded mostly higher Tuesday morning, although technology stocks lagged slightly. The move could signal some consolidation and profit-taking in the coming days after a multi-day rally that brought equities to the highest levels since early April. Today, the market focuses on more Fedspeak amid a light economic calendar.  

Nasdaq moves sideways

Nasdaq futures (/NQM4) were little changed Tuesday morning as prices hovered around the highest level traded since mid-April following a multi-day advance that launched the index back above the key 18,000 level. Still, prices have a way to go before reclaiming all-time highs traded earlier this year and resistance is growing amid signs of economic cooling.

Meanwhile, Disney (DIS) is trading 8% lower in pre-market trading after the company missed revenue expectations.  

Five-year notes move up

Five-year T-note futures (/ZFM4) traded higher this morning as bond traders ready for a series of auctions from the Treasury that will help to spread light on the demand for government debt amid a possible economic slowdown.

Today, the U.S. Treasury will auction $58 billion of three-year notes. Minneapolis Federal Reserve President Neel Kashkari will also speak today, which could cause some movement in Fed interest rate bets. Tomorrow, the Treasury will auction $42 billion of 10-year notes.  

Gold down slightly

Gold futures (/GCM4) moderated overnight, down 0.13%, following yesterday’s gains.

Data released overnight out of China showed that the Central Bank of China’s gold buying spree slowed in April, falling to 60,000 troy ounces bought. That was down from nearly 400k ounces in February and 160,000 in March.

Still, the central bank has now gone 18 months straight purchasing the metal as economic headwinds and geopolitical tensions fuel demand. Gold investors are at a crossroads, however, and prices are off the recent April highs. The rest of the week is light on data, but we have more than a couple Fed speakers due, which could spark buying or selling in the metal. 

Natural gas floats lower

Natural gas futures (/NGM4) pulled back on Tuesday after hitting the highest levels since early March on Monday.

Gas production in the United States has been falling since February as planned production cuts are implemented following a period of low prices. The latest data from the Energy Information Administration (EIA) showed that natural gas production for the week ending May 1 fell to 99.2 billion cubic feet per day from 99.6 the week before. If that trend continues, it could mean more upward price pressures.  

Australian dollar moves down

Australian dollar futures (/6AM4) softened after the Reserve Bank of Australia (RBA) failed to promote hawkish language in its interest rate decision where it kept rates unchanged overnight.

There was a chance that the RBA would take a more aggressive stance but that failed to materialize. While softer U.S. yields are containing the losses, the fundamental posture of the Aussie may weaken alongside broader risk sentiment.  

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

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 hostsFutures Power HourMonday-Friday andLet Me Explainon Tuesdays, and co-hostsOvertime,Monday-Thursday.@cvecchiofx
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