ALARON US TREASURY FUTURES REPORT 05/06/09
ECONOMIC DATA 05/07/09: all times EST
- 8:30 AM US WEEKLY JOBLESS CLAIMS (635K). US NONFARM PRODUCTIVITY (0.0%), UNIT LABOR COSTS (3.4%)
- 9:30 AM : FED CHAIRMAN SPEAKS
- 10: 30 AM: EIA INVENTORIES #: NATURAL GAS
SUMMARY OF DATA 05/06/09
ADP EMPLOYMENT REPORT:-491 K (MARCH REVISED TO -708 K)
EIA INVENTORY #: CRUDE (+0.6M, GASOLINE -0.2M, DISTIL +2.1 M, REFIN CAPACITY 85.2%
US 10 YEAR NOTE AUCTION (B/C 2.48, YIELD 3.190% COUPON 3.125%)
US TREASURIES REBOUND FROM WEAKER OPENING AFTER US 10 YEAR NOTE AUCTION RESULTS YIELD SUPRISING DEMAND.
US Debt and equity markets contended with a number of surprises generated from data releases and expectations that US financial institutions will not need as much capital as had been projected (Buy the rumor, Sell the fact….Again?!) The standout US debt instrument today was the US 10 year note, which bucked the trend of weaker demand for lower yielding fixed income after a surprisingly upbeat ADP jobs report showed nearly 300,000 fewer jobs were shed last month than had been forecast. While initially bearish for the whole complex, the results of today’s $22 billion auction came in surprisingly strong. Demand for 10 years was near the highest levels for 2009, with a bid to cover of 2.47 and a yield of 3.19% (coupon rate of 3.125%. The unique element of the auction was the fact that the strong bid to cover did not come at the cost of a dramatically higher yield, unlike recent auctions of US debt on the short and long end of the yield curve.
The combination of many Treasury instruments hitting key support levels (creating higher yields) and the perception that less capital may be needed to support the financial institutions, possibly resulting in the redirection of the massive Treasury float being redirected toward projects and programs which could have more concrete revenue potential. Treasuries are likely to trade in a narrow range ahead of Friday’s BLS labor report, with a possibility of a drift up to the top end of the channel of 123-160.
Technically, US 30 years are trading within a narrow channel, so using a daily and 60 minute RSI, the market seems to be setting up to test the top end of the resistance range at 123-210. Support for the channel remains firm at 121.240. A break of the downside is likely to gain stronger momentum vs. a number of layered resistance levels on the upside at 123-270,124-090, and 125-120.
|
US DEBT FUTURES |
OPEN |
HIGH |
LOW |
CHANGE |
|
|
US M9 (US 30 YRS) |
122-130 |
123-035 |
121-315 |
122-115 |
-6/32nds |
|
TY M9 (US 10 YRS) |
120-285 |
121-140 |
120-190 |
121-035 |
+5/32nds |
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.
