Commodity Trading School
COMMODITY TRADING SCHOOL US TREASURY FUTURES REPORT 06/22/09
ECONOMIC DATA 06/23/09: all times EST
- FOMC MEETING BEGINS
- 10:00 AM-EXISTING HOME SALES (4.85 M), STATE STREET INVEST CONFIDENCE INDEX
- 1:00 PM US 2 YEAR NOTE AUCTION ($40B)
US TREASURIES REBOUND AFTER WORLD BANK FORECASTED EXTENDED RECESSION AND DISAPPOINTING ECONOMIC GROWTH.
US TREASURIES rallied along with the US Dollar as risk aversion permeated the financial markets, pushing equities to their lowest levels since May and reinvigorating demand for secure fixed income investments. The fundamental catalyst was a forecast release by the World Bank stating the global recession will be deeper than previously forecast. The global financial institution, which provides leveraged loans to developing countries for capital programs, stated that it expects the global economy to contract as much as 2.9 % for 2009. This represents a significant increase from its previous estimate of 1.7%.
Traders chose to take advantage of the highest yields in nearly a week to initiate long positions particularly in the long end of the yield curve. A number of traders and investors seem to be speculating that the Federal Reserve may take elements such as the World Bank forecast as a sign that interest rates should remain at their near zero rate policy. This sentiment may offer additional positive momentum in the short term to Treasuries. However the gains are likely to be muted ahead of supply concerns which should reemerge as an influence on sentiment. The first of 3 US Treasury auctions are scheduled to take place on Tuesday, with $40 billion of 2 year notes. Record levels of US 5 and 7 year notes are scheduled to follow on Wednesday and Thursday,
TECHNICAL OUTLOOK-US 30 YEARS- Expect US 30 year bonds to trade higher in the near term up to the 116-250 level. Market should put in a resistance level at this point. This should allow for a pullback to initial support at 115-270. Look for breakout levels on the upside at 117-230 and 113-240.
US 10 YEARS- Current upward rebound should falter at 115-170, allowing for pullback to 114-200. Significant support for market should be found at 113-280. Break of this support should set up downside target of 112-200. Upside target on a breakout above 116-000 could signal additional upward momentum up to the 117-070.
EURODOLLARS- December Eurodollars appear to be topping out from recent rebound. 9902.0 should hold as a strong resistance, allowing for a initial pullback to 9889.0.
|
US DEBT FUTURES |
OPEN |
HIGH |
LOW |
CHANGE |
|
|
US U9 (US 30 YRS) |
114-310 |
116-130 |
114-235 |
116-115 |
+1-16/32nds |
|
TY U9 (US 10 YRS) |
114-140 |
115-080 |
114-080 |
115-045 |
+24.5/32nds |
|
ED Z9 (EURO $) |
9894.0 |
9902.0 |
9894.0 |
9900.5 |
+7.00 |
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.
