ECONOMIC DATA for Feb. 24, 2009: all times EST.
*10:00 AM US CONSUMER CONFIDENCE (35.5).
TREASURIES TRADE IN MIXED RANGE AS FLIGHT TO SECURITY IN WAKE OF DISASTEROUS EQUITY FALL TEMPERED BY CONCERNS REGARDING RECORD AUCTIONS.
U.S. Treasury futures posted a mixed session on Monday as the quest for secure yield in the wake of equities falling to their lowest levels since 1997 allowed the 30-year bond to post a positive return. The shorter end of the curve closed slightly negative, as traders and investors await the results of a record two- and five-year note auctions. The Treasury plans to auction $40 billion of two-year notes on Tuesday, $32 billion five-year notes on Wednesday, and $22 billion of the recently reissued seven-year note on Thursday. It is likely that the higher yield on 30-year bonds in the wake of collapsing equity prices kept the Treasury instrument from falling into negative territory, as traders and investors dropped the uncertainty of equities for the apparent security of government debt.
Treasuries also came under perceived supply pressures after the announcement by the U.S. government of plans to purchase an increase stake in many of the large financial institutions such as Citigroup and BOA. Purchases of these equity stakes would have to be funded with increased levels of debt, as tax revenues continue to dwindle.
Technically, March 30-year futures remain in a channel, with initial support at 126.19. Resistance should form at 128.12, with next level at 131.020.
US DEBT FUTURES
OPEN
HIGH
LOW
CLOSE
CHANGE
US H9 (US 30 YRS)
127.110
128.045
126.050
127.285
+8.5/32nds
TY H9 (US 10 YRS)
123.030
123.130
122.115
123.055
-4.5/32nds
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.
