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U.S. Morning Call for Tuesday, April 21, 2009
Overnight Developments
-
The
European DJ Stoxx 50 this morning is down -0.80%
and June S&Ps are down -5.50 points
(-0.66%). The Asia-Pacific stock markets today
closed mostly lower with Japan (-2.39%), Hong
Kong (-2.95%), China (-1.19%), Taiwan (+1.73%),
Australia (-2.43%), Singapore (+0.66%), South
Korea (-0.20%), India (-0.74%). Tesco Plc,
Europe's second-biggest retailer, is up 4.6%
after reporting Q1 sales ex-gasoline up 3.4%,
more than the 2.7% rise in Q4 sales. The Apr
German ZEW economic sentiment survey rose a
greater-than-expected +16.5 to 13.0, a 1-3/4
year high and the first positive reading for
German investor confidence since July 2007. Mar
German producer prices fell a
greater-than-expected -0.7% m/m, their sixth
straight monthly decline, and fell -0.5% y/y for
their steepest y/y drop in 6-1/2 years,
indicating deflation risks are increasing in
Europe's largest economy. The Reserve Bank of
India cut the reverse repurchase rate to a
record low 3.25% from 3.50% and forecast tha t
economic growth in Asia's third-largest economy
will ease to 6% in the year started Apr 1 from
7.1% the previous year, the slowest rate of
growth since 2003.
The
"U.S. Economic Preview" report, which is
sent each evening and provides analysis for the next
day's key events and economic reports is now
exclusively available through CRB Trader.
The U.S. Economic Preview provides a trader with
perspective on events before they occur the next
day, thus helping a trader to know better how to
react when a report is released.
Overnight U.S. Stock News
-
June
S&Ps this morning are down -5.50 points
after Bank of New York Mellon said Q1 earnings
dropped a greater-than-expected 51%. The US
stock market yesterday sold-off sharply and
closed near its low (Dow -3.56%, S&P 500
-4.28%, Nasdaq Composite -3.88%).
-
Bearish
factors for stock prices yesterday included (1)
weakness in bank stocks after JPMorgan Chase
predicted global banks are likely to realize
about $400 billion more in losses on bad assets,
requiring further injections of government
capital, (2) the sell-off in energy and
raw-material producers after crude oil plunged
to a 1-month low and copper prices tumbled, (3)
the prediction from Standard & Poor's that
companies in the S&P 500 Index may need to
divert cash from operations or sell assets this
year to meet underfunded retirement expenses,
and (4) the prediction from Goldman Sachs that
state and local finances will constrain the US
economic recovery as government officials are
forced to cut spending and raise taxes to meet
balanced budget requirements.
-
Bullish
factors for stock prices yesterday included (1)
the prediction from Obama administration
officials that there may be no need to request
more financial-rescue funds from Congress as
several banks plan to return taxpayer money and
others are pushed to tap private markets first,
and (2) the 37% surge in Sun Microsystems after
Oracle agreed to buy Sun for about $7.4 billion
in cash.
-
Texas
Instruments (TXN) is trading 2.3% higher in
pre-market trading after late yesterday
reporting Q1 net income of $17 million, or 1
cent a share, better than analysts' estimates of
a 4 cents a share loss. The company also said
earnings this quarter will be as much as 15
cents a share, greater than the 1 cent a share
forecast by analysts.
-
Bank
of New York Mellon (BK) tumbled over 9% in
pre-market trading after the world's biggest
custody bank reported Q1 earnings of 53 cents a
share, well below analysts' estimates of 63
cents, and it slashed its dividend to 9 cents a
share from 24 cents so it could build capital
and repay TARP funds it received from the
government.
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Today's U.S. Market Focus
-
June
10-year T-notes this morning are up +5 ticks.
June T-note prices yesterday remained
well-supported throughout the day and closed
higher by +24 ticks. Bullish factors for T-note
prices yesterday included increased
flight-to-safety demand for Treasuries after (1)
the stock market tumbled, and (2) JPMorgan Chase
predicted that global banks are likely to
realize about $400 billion more in losses on
soured assets, requiring further injections of
government capital. A bearish factor for T-note
prices yesterday was reduced safe-haven demand
for Treasuries after Obama administration
officials said that there may be no need to
request more financial-rescue funds from
Congress as several banks plan to return
taxpayer money and as other banks are pushed to
tap private markets first.
-
The
dollar index is little changed this morning with
the dollar/yen +0.27 yen and the euro/dollar
+0.23 cents. The dollar index yesterday rallied
for the fifth straight day and closed at a
1-month high. Bullish factors included (1)
concerns that a rift among ECB policy makers is
deepening after ECB Executive Board member Bini
Smaghi said the central bank's 1.25% rate is
"very close" to its floor,
contradicting two other ECB members who last
week said they supported interest rates below
1.00%, (2) the prediction from Wells Fargo that
the "ambiguity" of the ECB's monetary
policy stance will drive the euro down to $1.20
by year-end, and (3) flight to safety into the
dollar as the stock market tumbled. Bearish
factors for the dollar included (1) comments
from ECB Council member Nowotny that the ECB
shouldn't lower its benchmark rate below 1.00%
saying "The 1.00% limit is, in my view, one
which must not be undershot," and (2)
comments from ECB President Trichet that any f
urther rate cut by the ECB would be "very
measured" (i.e., 25 bp) and that a zero
interest-rate policy would not be appropriate
for the bank.
-
May
crude oil prices this morning are down -13 cents
a barrel and May gasoline is +0.10 cent a
gallon. May crude oil prices yesterday sold off
sharply and closed down -$4.45 a barrel at a
1-month low. May gasoline closed down -8.08
cents a gallon at a 2-week low. Bearish factors
for crude oil prices yesterday included (1) the
surge in the dollar index to a 1-month high, and
(2) the sell-off in the stock market which
raises concerns that the recession will linger
and reduce energy demand. Bullish factors
include (1) comments from the vice chairman of
China's National Development and Reform
Commission that China will give priority to
boosting its storage capacity of crude, possibly
boosting its demand for crude, and (2) comments
from the Algerian oil minister that OPEC should
cut crude oil production at its May meeting to
boost prices, saying "we would be taking a
big risk if we don't readjust supply."
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Today's U.S. Earnings Reports
Earnings
reports (confirmed releases for companies with
market caps above $5.0 bln listed by mkt cap)
KO-Coca-Cola (BEST earnings consensus $0.65 per
share), MRK-Merck & Co. ($0.78), UTX-United
Technologies ($0.78), GILD-Gilead Sciences ($0.61),
SGP-Schering-Plough ($0.47), BK-Bank of NY Mellon
($0.63), USB-US Bancorp ($0.22), LMT-Lockheed Martin
($1.65), UNH-UnitedHealth Group ($0.60), DD-Du Pont
($0.53), YHOO-Yahoo! ($0.08), CAT-Caterpillar
($0.05), BLK-Blackrock ($0.81), STT-State Street
Corp. ($1.03), NSC-Norfolk Southern ($0.56), NTRS-Northern
Trust ($0.97), BRCM-Broadcom ($0.03), WU-Western
Union ($0.28), JCI-Johnson Controls (-$0.17)
Global Financial Calendar
|
Tuesday 4/21/2009
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|
|
|
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United States
|
|
0745 ET
|
ICSC (Int’l Council of
Shopping Centers) weekly retailer sales,
previous +0.8% w/w and –0.4% weekly y/y.
|
|
0855 ET
|
Redbook weekly retailer
sales, previous +1.9% month-to-date m/m and
+0.9% month-to-date y/y.
|
|
1000 ET
|
Kansas City Fed President
Thomas Hoenig testifies before the Joint
Economic Committee in Washington D.C. on
“Too Big to Fail.”
|
|
1000 ET
|
Treasury Secretary
Timothy Geithner will testify before the
Congressional Oversight Panel.
|
|
1300 ET
|
Weekly 4-week T-bill
auction.
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1700 ET
|
ABC U.S. weekly consumer
confidence, previous –1 to -51.
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|
Germany
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0200 ET
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Mar German producer
prices expected –0.3% m/m and +0.1% y/y, Feb
–0.5% m/m and +0.9% y/y.
|
|
0500 ET
|
Apr German ZEW economic
sentiment survey expected +5.5 to 2.0, Mar
+2.3 to –3.5. Apr ZEW current situation
survey expected –0.6 to –90.0, Mar –3.2
to –89.4.
|
|
United Kingdom
|
|
0430 ET
|
Mar UK consumer price
index (CPI) expected unchanged m/m and +2.7%
y/y, Feb +0.9% m/m and +3.2% y/y. Mar core
CPI, Feb +1.6% y/y.
|
|
0430 ET
|
Mar UK retail price index
(RPI) expected –0.2% m/m and –0.5% y/y,
Feb +0.6% m/m and unchanged y/y. Mar RPI ex
mortgage interest payments expected +2.2% y/y,
Feb +2.5% y/y.
|
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Euro-Zone
|
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0500 ET
|
Apr Euro-Zone ZEW
economic sentiment survey expected +6.5 to
zero, Mar +2.2 to –6.5.
|
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1300 ET
|
ECB Vice President Lucas
Papademos presents the central bank’s annual
report to the European Parliament’s
Committee on Economic and Monetary Affairs and
speaks to the Parliament shortly thereafter.
|
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Canada
|
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0830 ET
|
Feb Canadian wholesale
sales, Jan –4.2% m/m.
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0900 ET
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Bank of Canada announces
interest rate decision
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Morning Quote Board
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Morning Quotes (ET)
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Last
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Chg
|
%chg
|
Updated
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US Stock Futures
|
|
S&P (Globex) (M9)
|
827.40
|
-5.50
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-0.66%
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07:10:53
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|
DJIA (CBOT) (M9)
|
7772
|
-48
|
-0.61%
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07:11:14
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|
|
|
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European Stocks
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Europe DJ Stoxx 50
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1916.27
|
-15.49
|
-0.80%
|
07:06:00
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|
London UK FTSE Index
|
3962.55
|
-28.31
|
-0.71%
|
07:06:00
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|
German Dax Index
|
4467.23
|
-19.07
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-0.43%
|
07:06:14
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French CAC 40 Index
|
2948.62
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-20.78
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-0.70%
|
07:06:00
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|
|
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Asian-Pacific Stocks
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Japan Nikkei Index
|
8711
|
-213
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-2.39%
|
03:00:16
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|
Hong Kong Hang Seng
|
15286
|
-465
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-2.95%
|
04:01:15
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China CSI 300 Index
|
2675
|
-32
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-1.19%
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03:00:56
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Taiwan TAIEX Index
|
5881
|
100
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1.73%
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01:46:01
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Australian S&P 200
|
3677.4
|
-91.6
|
-2.43%
|
02:47:03
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Singapore Str. Times
|
1887.25
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12.4
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0.66%
|
05:10:00
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South Korea KOSPI 200
|
171.96
|
-0.34
|
-0.20%
|
05:04:03
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Bombay Sensex 30
|
10898
|
-81.39
|
-0.74%
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07:12:48
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Karachi KSE-100
|
7834
|
-68
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-0.86%
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05:44:49
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US Interest Rates
|
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10yr T-notes (CBT)(M9)
|
123.060
|
0.050
|
0.13%
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07:11:05
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Cash 10yr T-note Price
|
99.125
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0.040
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0.13%
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07:21:01
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Cash 10yr T-note Yield
|
2.821
|
-0.015
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-0.52%
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07:20
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5yr T-note (CBT)(M9)
|
117.310
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0.015
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0.04%
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07:11:00
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Cash 5yr T-note Price
|
99.255
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0.005
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0.02%
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07:20:00
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Cash 5yr T-note Yield
|
1.793
|
-0.003
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-0.18%
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07:19
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30-yr T-bond (CBT)(M9)
|
126.31
|
0.10
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0.23%
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07:10:56
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Cash 30yr T-bond Price
|
96.305
|
0.115
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0.37%
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07:21:01
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Cash 30yr T-bond Yield
|
3.669
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-0.020
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-0.55%
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07:20
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Eurodollars (CME)(M9)
|
98.895
|
-0.015
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-0.02%
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07:10:57
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Eurodollars (CME)(U9)
|
98.860
|
0.000
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0.00%
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07:10:51
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Asian & European
Rates
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10-yr JGBs (TSE) (M9)
|
137.04
|
0.41
|
0.30%
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02:00:00
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|
EuroyenTibor(SGX)(U9)
|
99.490
|
0.010
|
0.01%
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06:02:58
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Bunds (Eurex) (M9)
|
123.14
|
0.25
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0.20%
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07:06:10
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Euribor (Eurex) (U9)
|
98.63
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-0.02
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-0.02%
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04:30:27
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UK Gilts (Liffe) (M9)
|
122.98
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-0.25
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-0.20%
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07:06:12
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Short Stlg (Liffe) (U9)
|
98.56
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-0.03
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-0.03%
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07:06:12
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Forex
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US Dollar-Japanese Yen
|
98.17
|
0.27
|
0.28%
|
07:21:14
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EuroFX-US Dollar
|
1.2944
|
0.0023
|
0.23%
|
07:21:14
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US Dollar-Swiss Franc
|
1.1689
|
0.0000
|
0.00%
|
07:21:14
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British Pound-US$
|
1.4554
|
0.0015
|
0.15%
|
07:21:14
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US$-Canadian Dlr
|
1.2372
|
-0.0019
|
-0.19%
|
07:21:12
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Yen (Globex) (M9)
|
1.0201
|
-0.0031
|
-0.31%
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07:11:06
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Euro FX (Globex) (M9)
|
1.2933
|
0.0016
|
0.12%
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07:11:07
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SwissFranc (Globex)(M9)
|
0.8558
|
-0.0005
|
-0.06%
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07:11:13
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|
British Pound(Glbx)(M9)
|
1.4533
|
-0.001
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-0.07%
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07:11:07
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|
Canadian$ (Globex)(M9)
|
0.8082
|
0.0000
|
0.00%
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07:11:13
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|
|
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Commodities
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Gold (Comex) (M9)
|
887.8
|
0.3
|
0.03%
|
06:51:13
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|
Silver (Comex) (K9)
|
12.120
|
0.015
|
0.12%
|
06:48:18
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Copper (Comex) (K9)
|
202.4
|
-8.0
|
-3.80%
|
06:50:43
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Crude Oil (Nymex) (K9)
|
45.75
|
-0.13
|
-0.28%
|
06:49:24
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|
Gasoline (Nymex) (K9)
|
141.29
|
0.10
|
0.07%
|
06:49:27
|
|
Heating Oil(Nymex)(K9)
|
133.8
|
0.64
|
0.48%
|
06:50:55
|
|
NaturalGas(Nymex)(K9)
|
3.558
|
0.018
|
0.51%
|
06:44:21
|
|
Corn (CBOT) (K9)
|
371.00
|
1.50
|
0.41%
|
07:10:58
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|
Soybeans (CBOT) (K9)
|
1020.25
|
1.75
|
0.17%
|
07:08:47
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Wheat (CBOT) (K9)
|
508.50
|
4.00
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0.79%
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07:08:26
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|
