US TREASURY FUTURES REPORT March 3, 2009
ECONOMIC DATA 03/03/2009: all times EST.
10:00 AM US PENDING HOME INDEX (85.1)
RESULTS FROM DATA 03/02/2009: PERSONAL INCOME (0.4% VS -0.2 % EST), CONSUMER SPENDING (0.6% VS 0.4%), CORE PCE PRICE INDEX (0.1% INLINE), ISM MFG INDX (35.8 vs. 33.8), US CONSTRUCTION (-3.3% vs. -1.5%)
US TREASURIES RALLY AS EQUITIES COLLAPSE TO MID 1990 LEVELS, FLIGHT TO SECURITY IN DOLLAR DENOMINATED ASSETS
U.S. Treasuries rallied, with the long end of the curve closing up almost one and a half handles, as the pendulum swung back to capital security concerns from issues regarding the level of debt supply expected to be flooding the market. Treasuries gained as interest in secure, dollar denominated instruments increased as a strong safe haven bid in the US dollar increased overall returns for Treasuries by foreign holders who saw their home currencies fall in the wake of increased global recession concerns. Risk aversion flooded back into the market in the wake of AIG’s historic quarterly loss and a report by stock trading icon Warren Buffet in his annual letter to shareholders that the economy is “In shambles.”
Expectations are for Treasuries to maintain a near to medium term bid in the wake of the no man’s land levels that volatility has driven equities into. Upward momentum should be views with caution, as the longer term concerns regarding supply levels of Treasury debt should return when the next round of Treasury Auction announcements hits the market. Expectations are that the levels of debt in the wake of declining tax revenues will not be dropping from their record levels in the near future.
Technically, June Treasuries went lead in Monday’s session. While equity volatility should provide for some additional upward momentum, look for an initial level of resistance at 126.17. Near term support sets up at 124.03, with a break of this level setting up for a test of the 123.10 level.
US DEBT FUTURES
OPEN
HIGH
LOW
CLOSE
CHANGE
US M9 (US 30 YRS)
123.170
125.145
123.170
124.235
+ 1 125/32nds
TY M9 (US 10 YRS)
120.080
121.235
120.075
121.115
+1 105/32nds
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.
