Another Month Coming to a Close

November 29, 2011 12:27 AM

What Traders are Talking About:

* Month-end positioning to give grain/soy futures a boost? Bears have dominated price action in the grain and soy complex in November, especially the past couple of weeks. As a result, it wouldn't be surprising to see short-covering boost grain and soy futures today and tomorrow on month-end trade. But the upside is limited to corrective buying at this time.

The long and short of it: Bulls face major challenges in trying to find more than modest corrective buying given a lack of fresh supportive fundamental news and the macro-economic uncertainties.

* Euro rises despite record Italian bond yields. Italian bond yields moved to record highs overnight, but there was good demand and issuance at the country's debt auction. As a result, the euro firmed against the dollar despite surging bond yields. With investors heavily short the euro, month-end short-covering could boost the euro and pressure the U.S. dollar today and tomorrow. But given euro-zone debt concerns, the upside is limited for the euro.

The long and short of it: Euro-zone finance ministers are meeting today in yet another attempt to come up with a viable plan to solve the region's debt crisis.

* Fitch lowers outlook, but keeps AAA rating for U.S. Fitch Ratings changed its outlook for the U.S. to negative from stable, but is leaving the U.S. sovereign debt rating at AAA for now. The credit rating agency says the U.S. must come up with a "credible" debt-reduction plan by the second half of 2013 or it would likely result in a downgrade of the U.S. sovereign rating.

The long and short of it: Moody's and S&P have also warned on the U.S. outlook, but none of the "big three" have lowered their sovereign debt ratings.

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