Commodity Trading School
COMMODITY TRADING SCHOOL US TREASURY FUTURES REPORT 06/25/09
ECONOMIC DATA 06/26/09: all times EST
- 8:30AM PERSONAL INCOME 0.4%, CONSUMER SPENDING 0.3%,
- 9:55 AM US CONSUMER SENTIMENT (69.7)
2009 1ST QUARTER GDP (REAL-5.5% vs. -5.7%)
WEEKLY JOBLESS CLAIMS (627 K VS.613K)
EIA INVENTORY REPORTS (NAT GAS 94 BCF VS 114 BCF)
US 7 YEAR NOTE AUCTION ($27B BID TO COVER 2.82, YIELD 3,329%)
US TREASURIES REBOUND AFTER 7 YEAR AUCTION RESULTS, MARKET FINDS CATALYST ON NO END IN SIGHT FOR LOW INTEREST RATES, RISING UNEMPLOYMENT.
US TREASURIES rallied back from yesterday’s late session collapse as the final auction the week, $ 27 billion of 7 year notes, completed a “hat trick” with regards to surprisingly positive reception. The bid to cover was 2.82 vs. 2.26 in May, with the yield coming in nearly 2 basis points below expectations. Additional foundation for support came in as the market digested the notion of a continuing low rate environment as spelled out from the post meeting comments by the FOMC on Wednesday. So the outlook for Treasuries now looks positive based on these developments? Consider these mitigating circumstances. The well received auctions this week were driven primarily by indirect bidders, a class of investors that includes foreign central banks. The qualifications for this category of buyers were modified by the elimination of a provision that allowed some customer awards to be classified as dealer bids. Demand was also somewhat pent up as Treasury auctions went on hiatus at the end of May, giving the markets some breathing room from supply concerns. Whether this demand continues will be a condition of Treasury supply and whether the funds created from the sales begin to go toward the creation of jobs.
Additional support was built on a notion of stability with regards to economic outlooks. Higher than expected new unemployment claims and the well received testimony of Fed Chairman Bernanke offered continued support to the ongoing strategies that include ongoing low interest rate environments. The appeal of certainty (even certain “doom”) can always offer support to any financial market.
TECHNICAL OUTLOOK-US 30 YEARS- US 30 years are butting up against the 61.8 Fibonacci retracement level and with fundamental euphoria likely to subside in the coming week, the market should pulled back to a near term support of 117-080. If this level holds, the market could move higher to test the 118-260 level and could represent an attempt to set up an upward breakout to 120-090. A more likely scenario will be for the market to range trade, with a pullback to 115-110 setting up as a target downward pullback
US 10 YEARS- Market also testing resistance at 116-145, should pullback to near support at 115-155. Look for next downward target to be found at 114-240.
.
EURODOLLARS- December Eurodollars continues to spike and set up for a steep fall. Continue to see possible scale trade that should pull back to 9889.0 as initial downward target.
|
US DEBT FUTURES |
OPEN |
HIGH |
LOW |
CHANGE |
|
|
US U9 (US 30 YRS) |
116-200 |
118-095 |
116-065 |
118-005 |
+1 14.5/32nds |
|
TY U9 (US 10 YRS) |
115-055 |
116-110 |
114-265 |
114-265 |
+1 00.5/32nds |
|
ED Z9 (EURO $) |
9906.0 |
9915.0 |
9903.0 |
9912.5 |
+7.0 |
Prepared by Rich Roscelli & Paul Brittain.
EMAIL QUESTIONS OR COMMENTS TO RICH@BINVSTGRP.COM
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. Whitehall Investment Management, 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.
