ALARON US TREASURY FUTURES REPORT 04/29/09

ECONOMIC DATA 04/30/09: all times EST

  • 8:30 AM US PERSONAL INCOME (-0.2%), CONSUMER SPENDING (0.0), EMPLOYMENT COST INDEX (0.5), WEEKLY JOBS CLAIMS (640K)
  • 9:30 AM CHICAGO PMI (35.0)
  • 10:35 AM EIA NAT GAS INVENTORY REPORTS

SUMMARY OF DATA 04/29/09

US GDP 1ST Q 2009 (-6.1% VS.-5.0%), US 3 YEAR ($35 B), 10 YEAR NOTE ($22 B), 30 YR ($14 B) ANNOUNCEMENT. EIA INVENTORY REPORT (CL +4.1M, RBOB -4.1 M, DIST (+1.8M) (CAP UTIL 82.7) US 7 YEAR NOTE AUCTION (2.28 B/C YIELD 2.63%) FOMC MEETING ANNOUNCEMENT NO CHANGE IN TARGET RATE (0.0 TO 0.25%)

US TREASURIES PRICES DROP TO 2009 LOWS AFTER FOMC ANNOUNCES NO PLANS TO INCREASE PURCHASES OF TREASURY DEBT. US 7 YEAR AUCTION GARNERS RESPECTABLE DEMAND.

US Treasuries continue to be pressured by the market’s ability to find diamonds in almost any rough as equities rallied above key resistance levels. A dramatic spike down in bond prices was fueled by the FOMC meeting announcement released on Wednesday. In addition to the expected announcement that the committee would be keeping interest rates at their current target levels (0.0 to 0.25%), the FOMC offered a “sucker punch” to Treasuries by stating that they would be keeping purchase targets unchanged. The decision was based on the committee’s belief that enough signals have emerged to suggest that the worst of the recession may be behind the markets. The dramatic pullback in Treasury prices in the wake of the announcement drove yields on Treasuries to their highest levels of 2009 (Prices/yields move in inverse directions).

Treasuries failed to gain any positive momentum from the beginning of the session. Even a significantly worse reading on 1st quarter GDP for 2009 failed to spur interest in safe haven investing, as the dissection of the GDP numbers showed better than expected consumer spending. The additional negative contribution was due primarily to a slump in inventories, which is being considered a fading problem as shrinking inventories should yield increases in productivity. The sense that the FOMC is seeing signs of a forming bottom will give additional credence to the meeting minutes in May, as the markets should start to look for signs of inflation and an end to the “rainbow” of emergency, easy credit.

Technically, June 30 year futures continue within its newly established downward trend. The market came close to testing a key support at 122.160. The spike down to 121.250 appears to be a rogue move for the time being. RSI Indicators have set up support for this market to come in at 122.08. A break of this level leaves downward momentum to test the 120.22 level. A rebound to fill in a gap should test the 123.13 level

US DEBT FUTURES

OPEN

HIGH

LOW

CLOSE

CHANGE

US M9 (US 30 YRS)

123.210

124.130

121.250

122.240

-1.02/32nds

TY M9 (US 10 YRS)

121.190

121.305

120.160

121.040

-17.5/32nds

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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.