Nasdaq 100 Continues Sideways Shuffle; Cut Odds Up After Claims

Nasdaq 100 Continues Sideways Shuffle; Cut Odds Up After Claims

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

2. 30-year T-bond futures (/ZB): -0.21% 

3. Silver futures (/SI): +1.97% 

4. Natural gas futures (/NG): +0.69% 

5. British pound futures (/6B): +0.01% 

For the third consecutive day, financial markets are relatively quiet. After closing at 18195 on Monday, the Nasdaq 100 (/NQM4) has done nothing for nearly 48 hours, currently sitting at 18175.

The economic calendar remains thin, though the latest weekly U.S. jobless claims report showed an unexpected uptick in initial claims that help boost Fed rate cut odds for the remainder of 2024.

Elsewhere, you guessed it–the Japanese yen (/6JM4) is the weakest major currency as markets continue to challenge Japanese policymakers after their recent intervention efforts.

Nasdaq futures move up

Nasdaq futures bounced after U.S. jobless data helped to bolster Fed rate cut bets.

Arm Holdings (ARM) fell about 5% in pre-market trading after offering soft revenue guidance for the fiscal year. Airbnb Inc (ABNB) trimmed nearly 8% in pre-market trading after signaling a slowdown in travel for the U.S., which will impact its home-renting business. However, Robinhood Markets (HOOD) rose nearly 7% after a rise in trading revenue, led by crypto trading.  

30-year bond auction today

The 30-year T-bond futures (/ZBM4) are in focus ahead of the Treasury’s 30-year bond auction today.

This offering wraps up a big week of issuances for the U.S. The 10-year auction was met with rather weak demand yesterday, with traders offering a yield of 4.483% versus the when-issued 4.473%.

Still, yields are lower today following the jobs data and bond traders may continue to buy, especially if we see a strong showing for today’s $25 billion worth of bonds. 

Silver moves up

Silver prices (/SIN4) are leading precious metals higher as the dollar and yields weaken on U.S. data. /SI is above the psychologically important 28 level, although it remains off its April highs.

The metal will likely need more aid from yields if it is to challenge those levels, as long positioning among speculators has faded in recent weeks—likely due to profit taking. If rate cut bets start to move forward a bit more, it could provide the necessary fuel for longs to get back into the market in mass. 

Natural gas moves higher

Natural gas prices are higher Thursday morning as traders continue to push the commodity higher amid a pullback in production.

The Energy Information Administration (EIA) will provide an update on natural gas inventory this morning, with traders expecting a build of 87 billion cubic feet (bcf) for the week ending May 3.

Earlier this week, Mike Wirth, CEO of Chevron (CVX) told CNBC interview, that natural gas consumption will exceed expectations because of data centers and artificial intelligence, underpinning a recent market narrative that has helped natural gas prices.

British pound doesn't change much

British pound futures are nearly unchanged after early weakness following a dovish Bank of England (BoE) rate decision.

The Monetary Policy Committee (MPC) voted 7-2 to keep rates unchanged, notching an additional member in favor of rate cuts. Governor Andrew Bailey sounded optimistic that inflation would come down to target over the short term, setting the path for a rate cut. The pound recovered after some broader dollar weakness on U.S. jobs data.  

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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