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MARKET TALK/FX: Stock Index Futures Slip From Highs

[MARKET TALK/FX is edited by Darlene Ross]
[of Dow Jones Newswires, 201 938-2085; darlene.ross@dowjones.com]

1913 GMT [Dow Jones] Stock index futures slip from earlier highs, traders say some news on Iraq may be to blame amid reports a US helicopter may have killed 40 in Iraqi wedding party. Traders report Man lead seller in S&Ps, good for 500 contracts and trapping some day-trading longs. Support 1093.80, part of a technical chart gap that extends down to 1090.30. June S&P last +5.70, June Nasdaq +15.50, June DJIA +49. (KJZ)

1842 GMT [Dow Jones] Most fed funds futures contracts fall with losses in other interest rate futures. The market is "reacting off a strong Dow," says fed funds pit trader. DJIA +61 pts, 0.62%, to 10030. Trader notes that Fed expectations priced into contract still remain much the same. He says about a 96% chance of a 25 BP rate hike now priced in for the June 30 FOMC meeting. Contract also sees a 100% chance of either a 50 BP hike in August or a 25 BP hike in July and another 25 BP hike in August. (CMN)

1839 GMT [Dow Jones] Chile peso's gains this week put it back on strengthening trend, traders say. Break of CLP635/USD resistance opens way for CLP630.00. Closes at CLP636.20 vs CLP640.50. (STK)

1832 GMT [Dow Jones] EUR/USD drifting lower, giving back gains as it struggles to hold much above 1.2000 after failure to make successful break above 1.2050. Now at 1.2003, recent range of 1.1750-1.2050 looks intact for a while yet. USD clawing back losses elsewhere, with USD/JPY bouncing back from 1-week low to 112.76. (JMG)

1650 GMT [Dow Jones] Stock index futures building steam as session wears on. Good dealer flows reported, some playing both sides of market. One technician says June S&P needs to close above 1102.00 to recharge the bullish trend; otherwise, move could be classified as on oversold bounce within a range. Nasdaq showing signs of life and leading market up, seen as positive sign. June S&P last +11.70, June Nasdaq +24.00, June DJIA +100. (KJZ)

1649 GMT [Dow Jones] Fed's Stern very much sticking to same tune as that of his colleagues, in stressing inflation levels aren't worrying. "We haven't seen much of an uptick in inflation, just a touch so far," he tells CNBC. "I think we want to conduct policy so that growth can be extended over extended period of time." Stern also says that while higher oil prices will "crimp spending a bit," the economy will adjust "reasonably well to fluctuations in energy prices." Stern's currently not an FOMC voter. (GMM)

1549 GMT [Dow Jones] The implied volatility on 10-year note contracts is lower despite the weakness in prices, notes BondTalk.com. Implied volatility in the at-the-money options is under 8%, a potential sign of complacency about the bond market's ability to hold current levels. (CMN)

1534 GMT [Dow Jones] USD certainly not tracking US Tsy yields Wed. USD sliding across board, yields near intraday highs, with 10-yr note yielding 4.78%. USD/JPY lower at 112.60, EUR/USD up at 1.2030. But USD inverse relationship with gold well intact - spot gold up around $6 at $383/oz. (JMG)

1531 GMT [Dow Jones] Stock index futures extend gains, pass resistance at last week's highs. June S&P moves above 38.2% retracement level of 1103.80, a key technical marker. Buyers in S&Ps include ABN and Lehman with 800 contracts, Morgan Stanley and Goldman with 500. JP Morgan takes sell-side, good for 800, Goldman also sells 600 and Morgan Stanley sells 500. June S&P last +13.90, June Nasdaq +27.00, June DJIA +118. (KJZ)

1531 GMT [Dow Jones] USD/CAD has extended its losses and is flirting with a break through important support in the C$1.3745-50 area. Currently at C$1.3763 after touching a low of C$1.3744. After C$1.3745-50, next support seen at C$1.3720, and then more critically at C$1.3700. (DBC)

1525 GMT [Dow Jones] USD slips to intraday lows vs several major counterparts. EUR/USD jumps to 1.2044, and will likely test resistance around 1.2050-60, says HSBC chief currency strategist Marc Chandler. Sees move driven more by positioning than fundamentals, adding, "In general, people think the dollar has gotten as much out of the interest rate story as it's likely to get." Now at 1.2027. USD/JPY at 112.59 after dip to 112.44, USD/CHF at 1.2768 from low of 1.2751. (RTB)

1522 GMT [Dow Jones] EUR/USD looking to test key resistance around 1.2050-60 as USD slips across board. USD/JPY managing to hold up around 112.50 but if stops building up below there get triggered, EUR/USD will make real test that resistance. At 1.2030, USD/JPY 112.51. (JMG)

1514 GMT [Dow Jones] USD/JPY slide appears to be driving USD lower across board, says Japanese bk dealer. Reports of US Taylor saying no BOJ/MOF intervention since March 16, Japan economic recovery looking sustainable, could be catalyst. "He's just stating the obvious but the market is desperate to sell USD/JPY and this is just the excuse." At 112.55, stops lying below. EUR/USD up to 1.2030. (JMG)

cable hasn't read the script,

we're the only g7 country self-sufficient in oil,
and drops

i'm expecting a big bounce - but remember cable is
female !

It's good to see that you respect superiority, Beebs.

:o)

I've got my bear hat on for a few days now and have shorted the EUR/USD pair this morning.

I was looking for a low risk trade which I could leave until the beginning of next week (Pipex have confirmed that I'll have my new broadband connected sometime on Monday). The reward probably won't be as great as it would be with Cable, but nor is the risk and those hawkish comments eminating from the BoE et al are capable of making the predictable unpredictable. There's little risk imo of the nambypambies at the ECB being anything other than doveish.

No one around in the big blue FX house today....
and yet fun and games start in 30 mins

I am now short Cable at 1.7707
though was long at 1.7650 this am
and spent most of it very nervous

Now I look back two clear doji's on the 4 hour at
yesterdays highs...

Immediate trading range seems to be
1.7620 to perhaps 1.7550 at best..
expecting this to be broken to the downside
during the course of the afternoon

watch for 'front running' at 13:26
No figures tomorrow so the focus will be even more prounced on
todays figs at 13:30 and 15:00 imho

Cable stop at 17765

i'm long ahead of 3.00 figs david,
though they probably dont carry the same
weight as empl. figs.

stop in at entry.

from my limited knowledge of charting,
i think the upward sloping consolidation
favours your position to mine,

talking of which you mentioned a 4 hr
chart with doji's from yesterday,
any chance you could post it here for me ?

went Long at the release of the numbers. Aiming for 77 (todays pivot point from the daily)

Not to clued up right now.. Doubting my abilities

almost as scintillating as equities today....

'deuce' david

hope we get there tellon - seems a long way
off at the mo....

Stoped out for a small loss 17pips

I am long after my short got stopped out

though will feel better at
17855 and above

Did anyone go long around 3AM?
I had long from yesterday around 8.45AM (truly). It wasn't that scientific, it had dropped a lot, there were a few bottoms around 1.7650/60 (I am via sb) and Saxo bank said support in that region. So it seemed a good idea. With a wide stop, I survived the 3AM pullback but the tightened stop was hit just a little earlier.
Reentry, boat or garden?

Im waiting a bit and im looking to go short

Are you going short anywhere in particular Tellon.
I was long but I certainly missed the last bit!

Reversed my long at 17952 now short..
but in a smaller amount

market has moved 300pips since yesterday

didnt have a particular price. Was just waiting for it to hit my indicators.
Went short at 17936

After such a run up..
was looking at the 4 hourly..to see old resistance little above
17950 to 17990 back at the beginning of the month
this aoccured over several days 4th to 8th
stood to reason that we were not going to get over that...especially given the
push we have had so far today.

that coupled with the 1.7950 phycho area...meant to me...
(and from the look of the price since to the big boys)..that it was a low risk short or take profit on longs area

cant see us higher than that today..
any return near the highs...I will add to my short

17950 back to 17875 probably the new trading range..before a push higher next week

17952 a great short, have one from a bit lower than that via sb

Well done to anyone who got the 300 on the upside.

morning all,
sorry i'm late on parade,
pc problems - first of all keyboard knackered,
then adsl modem decided to go on strike,
currently on dial up - so only intermittent
for me today......

still got my cable long i'm pleased to say,
and i agree now looks a tad overbought, but have
decided to keep it. expect a little correction
back to say 178.60 - see there's a nice base line there now.

great short entry foale - let me know when you cover...

Reversed at 17912
sorry never saw you post
but out of long for a few

and probably done for the day...

Cant see 17955 getting taken out...and
support at lower levels


though have a limit order long in at around
17875...just in case