ALARON US TREASURY FUTURES REPORT 05/05/09
ECONOMIC DATA 05/06/09: all times EST
- 8:15 AM ADP EMPLOYMENT REPORT
- 10:30 AM EIA INVENTORY REPORT (CRUDE, PRODUCTS, CAPACITY UTIL)
- 1:00 PM US 10 YEAR NOTE AUCTION ($22 BILLION)
SUMMARY OF DATA 05/05/09
US ISM NON MANUFACTURING INDEX (43.7 vs. 42.0), US 3 YEAR NOTE AUCTION ($35 B-B/C 2.66, YIELD 1.473% VS COUPON 1.375%).
US TREASURIES TRADE MIXED. CAUTIOUS TONE AHEAD OF MARCH EMPLOYMENT DATA OFFERS SOME SUPPORT AFTER HIGHER YIELDING US 3 YEAR NOTE AUCTION.
US TREASURIES bounced between gains and losses as a cautious sentiment entered Tuesday’s session ahead of the release of US employment data. This element was one of the few supportive criteria for Treasuries today, as equities remained surprisingly buoyant on profit taking after Monday’s strong rally. In addition, Treasuries continue to grapple with concerns regarding record levels of supply. Tuesday’s auction of $35 billion of 3 year notes fell into the pattern of recent auctions on the short and long end of the yield curve, as average to above average bid to cover ratios (measure of the amount of debt taken by bidders compared to the amount offered) are being achieved at the cost of higher yields deemed necessary by the bidders in the wake of improving economic indicators, corporate debt market and freeing up of credit spreads. Additional auctions of 10 year and 30 year are scheduled for later this week.
Trading volumes are down significantly from last year as the demand for secure debt has subsided due to thawing of credit issues and the appeal of higher yielding corporate instruments. Treasuries could regain a center stage position by late 2009/early 2010 if the markets feel that gains from the corporate sector will be viewed as tribute owed to the government in the form of higher corporate taxes and populist regulations.
Additional pressure on Treasuries occurred after a reading on the service industry came in better than expected.
Technically, June 30 year futures continue to test the strength of its downward momentum. Support on the downside of the market remains in place at 121-16, with a key breakdown level for the contract remaining at 120-300. Resistance for the contract sets up at 123-120.
|
US DEBT FUTURES |
OPEN |
HIGH |
CHANGE |
||
|
US M9 (US 30 YRS) |
122-120 |
122-255 |
121-270 |
122-175 |
+1/32nds |
|
TY M9 (US 10 YRS) |
120-270 |
121-035 |
120-180 |
120-305 |
+1.5/32nds |
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.
