ECONOMIC DATA FOR FEB. 11, 2009: all times EST.
8:30 AM US RETAIL SALES (-0.8%) US WEEKLY JOBLESS CLAIMS (610K)
10:00 AM US BUSINESS INVENTORIES (-0.8%)
10:35 AM EIA NATURAL GAS INVENTORY
1:00 PM US 30 YEAR BOND AUCTION ($14 B)
TREASURIES BUILD ON TUESDAY’S GAINS AS SMALLER STIMULUS PACKAGES MEANS LESS GAINS FOR BUSINESS, SMALLER POTENTIAL DEBT FLOAT.
U.S. Treasuries continued to build off of Tuesday’s strong rally as the continuing uncertainty of the economic landscape and another trading session without further specifics regarding the economic stimulus plan created additional demand for higher yielding, secure debt. Support offered to the longer end of the yield curve managed to overcome downbeat results from a $21 billion auction of U.S. 10-year notes. The auction posted a higher than expected yield/lower bid to cover ratio, demonstrating that investors remain wary of committing capital beyond what many consider the far end of the down turn/recovery cycle, as traders and investors see the deficit spending by the U.S. government leading to inevitable inflation. Additional support through this disappointing auction was garnered from the belief that the lower price tag on the stimulus package will allow the Treasury to initiate direct purchases of Treasuries again in order to offer stability and liquidity to the market. To combat the perceived value erosion, investors will look for higher yielding debt and equity instruments to combat this inflation. This is assuming of course that the United States financial system still exists as some form of a capitalistic structure.
Technically, March 30-year futures continue their upward momentum after bouncing off key support level at 125.12. While RSI indicators still present the markets as being overbought, indications are for the market to continue upward to test the 13,000 level, with the next upward target level at 131.14. Downward retracement should settle in near the 127.07 level.
US DEBT FUTURES
OPEN
HIGH
LOW
CLOSE
CHANGE
US H9 (US 30 YRS)
128.070
129.060
127.270
128.235
+26.5/32nds
TY H9 (US 10 YRS)
123.080
123.300
123.025
123.215
+18.5/32nds
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.
