ALARON US TREASURY FUTURES REPORT 04/21/2009
ECONOMIC DATA 04/22/2009: all times EST
10:35 AM EIA INVENTORY NUMBERS (OIL, PRODUCTS, CAP UTILIZ)
SUMMARY OF DATA
04/21/09 STATE STREET INVESTOR CONFIDENCE INDEX (79.0 VS. 70.0)
US TREASURIES TURN NEGATIVE AFTER EQUITIES STAGE TURNAROUND, FED DISAPPOINTS WITH LACKLUSTER PURCHASE OF TREASURY DEBT.
US TREASURIES retreated into negative territory as equities rebounded from Monday’s 4 % slide. The flight to security appeared to be setting up for a second round this morning after a series of poor earnings from companies such as Caterpillar, Pepsi, and Eli Lily put pressure on the major equities in the premarket session and offered a bid to Treasuries. As Treasuries reached the high end of their recent range, Treasury Secretary Geithner stated that the majority of banks currently undergoing the government’s “stress test” were being found to be well capitalized and likely to pass the criteria set up to determine solvency. The turnaround in equities, which allowed them to close near the highs of their session, inversely influenced Treasuries as risk tolerance increased and secure investments took it on the chin.
Additional pressure on Treasuries resulted from disappointment from the Federal Reserve’s anemic purchase of Treasury Debt today. The purchase of $7 billion of debt was less than what the market had been expecting. With no major auctions of longer yielding debt this week, buyers paid extra attention to the actions of Fed buying as a catalyst for market direction. Today’s disappointment translated into a retest of Treasuries recent support levels. Recovery from these levels could be possible though provided the lower than expected purchase by the Fed was an attempt at money management, with greater quantities of purchases initiated by the Federal Reserve at lower price/higher yield levels. Money management by a government body may no longer a complete contradiction in terms.
Technically, June 30 year Treasuries bounced within ongoing support and resistance levels, testing the limits of both sides. Should a break and hold of the 125.120 level occur, the market will likely take another step down to 124.180 in order to confirm the possible establishment of a trend. A recovery bounce should meet resistance at the 126.180.
|
US DEBT FUTURES |
OPEN |
HIGH |
LOW |
CLOSE |
CHANGE |
|
US M9 (US 30 YRS) |
126.175 |
127.190 |
125.150 |
125.210 |
-1.00/32nds |
|
TY M9 (US 10 YRS) |
123.015 |
123.150 |
122.100 |
122.130 |
-20.0/32nds |
Prepared by Rich Roscelli & Paul Brittain.
Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. Alaron Trading Corp. its officers and directors may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.
