US TREASURY FUTURES REPORT 04/01/2009
ECONOMIC DATA 04/02/2009: all times EST
- 8:30 AM US WEEKLY JOBS CLAIMS (655K)
- 10:00 AM US FACTORY ORDERS (1.5%)
- 10:30 AM EIA INVENTORY REPORTS (NAT GAS)
ECONOMIC DATA 04/01/09 ADP EMPLOYMENT REPORT (-742 K VS.697 K), ISM MANUFACTURING (36.3 VS 36.0), US CONSTRUCTION SPENDING (-0.9 VS -1.9, PENDING HOMES DATA (82.1), EIA INVENTORY NUMBERS (CRUDE OIL +2.8 MIL, RBOB +2.2 MIL, DISTILATES +0.3K.
TREASURIES CONTINUE TO BREAK HIGHER AS FED INCREASES SUPPORT BUYING, TECHNICAL RESISTANCE BREECHED, CONTINUED HAVEN FROM VOLATILITY.
US Treasuries continued to post gains as technical resistance levels were breached and investors continued to seek a hedge against volatility and risk. In addition, Treasuries received additional positive sentiment from an increase in buying by the Federal Reserve. Wednesday’s session had the Fed buying over $6 billion of US government debt-its largest one day purchase so far.
Treasury futures posted a volatile early session, swinging between fundamentally driven gains and losses, after reports that the Obama administration sees bankruptcy of either General Motors or Chrysler as perhaps being the most viable answer to restructure the pressured auto firms. The first reading on February employment (ADP) came in worse than expected, offering additional support for the bullish move in Treasuries. Treasuries retraced into negative territory after data releases for manufacturing and pending home sales proved better than analyst’s expectations. This prompted a selloff in fixed income as equities began their session rally. Buyers returned to the Treasury market, pushing it to its highest levels of the session as the Federal Reserve bought its largest block of Treasury debt to date. Traders took advantage of the drop in prices to position themselves ahead of Friday’s BLS (US Bureau of Labor Statistics) readings on payrolls and employment. Expectation of the highest level of lost jobs to date seen as bullish for market and Federal Reserve buying of debt.
In addition, Treasuries received additional support from quarterly rebalancing of portfolios. For 2009, Treasuries have posted an investment loss of 1.4%, the worst start since 1996. Considering the level from which they retraced, the overall return seems not so bad.
Technically, June 30 year Treasuries pierced and held above targeted resistance level of 130.185. This puts the contract in striking distance of retesting the high spike of 132.00. RSI reading shows the market to be in overbought territory so traders should expect a possible pullback to 129.10. Support for the market has formed at 128.025 with 126.130 as key support level.
|
US DEBT FUTURES |
OPEN |
HIGH |
CHANGE |
||
|
US M9 (US 30 YRS) |
129.280 |
130.210 |
129.135 |
130.185 |
+28/32nds |
|
TY M9 (US 10 YRS) |
124.070 |
124.135 |
123.290 |
124.090 |
+6/32nds |
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.
