ECONOMIC DATA FOR FEB. 19, 2009: all times EST.
PPI (0.2%, -2.1%) EX FOOD ENERGY (0.1%, 3.8%), WEEKLY JOBLESS CLAIMS (620K)
10:00 AM LEADING INDICATORS (0.0), PHIL FED (-26.0)
10:30 AM EIA OIL, NATURAL GAS. 11:00 AM US 2, 5 YEAR NOTE AUCTIONS.
TREASURIES TRADE IN SEESAW SESSION, CLOSE IN RETREAT ON SUPPLY CONCERNS AHEAD OF THURSDAY’S TWO- AND FIVE-YEAR NOTE AUCTIONS
U.S. Treasuries ended the session mostly lower, with the 30-year returning the lowest percentage of its gains from Tuesday’s session, as the shorter end of the yield curve came under pressure as the market awaits the results of Thursday’s U.S. two- and five-year note auctions. While two-, five- & 10-year futures stayed in negative territory throughout most of the session, 30 year futures managed to post gains after a weaker than expected report on housing starts and a fall of equities to Nov 2008 lows sent traders & investors scrambling to the high secure yields that could be found.
By the end of the session, even the 30-year succumbed to the downward momentum caused by concerns regarding the supplies of government debt needed to fund existing and proposed stimulus programs such as the $75 billion proposed mortgage payment assistance plan. In addition, comments from Fed Chairman Bernanke suggested that the likely U.S. unemployment figures will post well above the 8.5% level. This high level of job erosion is being perceived as greatly decreasing the ability of the government to collected revenue through payroll deductions. This will further increase the burden of revenue support upon the sale of Treasury debt. The results of Thursday’s auction in the wake of this perceived renewed pressure should have an even more significant effect upon the direction of Treasuries for the near term.
Technically, 30-year March futures appear to be positioning for an attempt at a double top near the 131.10 level. Movement through this level should allow the market to gain upward momentum to 134.02. Support remains near the 127.260, with stronger support at 126.080.
US DEBT FUTURES
OPEN
HIGH
LOW
CLOSE
CHANGE
US H9 (US 30 YRS)
129.140
130.125
128.040
128.210
-22/32nds
TY H9 (US 10 YRS)
124.175
124.250
123.080
123.215
-24.5/32nds
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.
