ECONOMIC DATA FOR 03/05/09
8:30 AM-US WEEKLY JOBLESS CLAIMS (650 K), US NONFARM PRODUCTIVITY (1.5%), UNIT LABOR COSTS (3.4%)
9:00 AM- US 30 YEAR BOND ANNOUNCEMENT
10: 00 AM-US FACTORY ORDERS (-3.5%)
10:30 AM EIA INVENTORY REPORT (NAT GAS)
RESULTS FROM DATA 03/04/2009:)
8:15 AM ADP EMPLOYMENT REPORT (-697,000 vs.-522,000) 10:00 AM: ISM NON-MFG INDEX (41.6 vs. 41.0)10:30 AM EIA INVENTORY (CRUDE -700,000 RBOB +168 K, DISTILLIATES +1.1 MIL. REFINERY UTILIZATION 83.1)
U.S. TREASURIES FALL FOR SECOND SESSION AS EQUITIES REBOUND FROM MULTIYEAR LOWS, SUPPLY CONCERNS RETURNS AS MARKET AWAITS ANOTHER RECORD AUCTION OF U.S. 30-YEAR DEBT.
U.S. Treasuries fell for a second session as equities staged a strong rally which pulled the major averages back above key psychological levels and supply concerns loomed again as the markets await Thursday’s announcement of what is likely to be another record Treasury auction, this time of U.S. 30-year debt.
Treasuries could not overcome the rebound in equities, initiated by an Asian rebound as China and Japan announced more aggressive stimulus action, reviving the notion of global coordination to deal with the economic crisis. This reversal of sentiment, whether temporary or not, lowered interest in lower yielding, secure financial instruments, such as government debt. In addition, the impending announcement $60 billion of U.S. 30-year debt at the next Treasury auction pressured the markets on the issues of supply as well as inflation concerns for the longer end of the yield curve. It remains a day to day battle to determine which of these counter forces (supply, security) concerns directs the movement of Treasuries. This should result in the markets trading in a widening channel pattern until a more clearly defined trend is able to emerge.
Technically, June 30-year bonds continue to trade within a relatively narrow channel. Expectations are for the next move to break to the downside, with an initial downward support level at 122.25. If this level breaks, it could set up for a longer term target of 120.150 Resistance has set up at 124.230.
US DEBT FUTURES
OPEN
HIGH
LOW
CLOSE
CHANGE
US M9 (US 30 YRS)
125.035
125.060
123.100
123.245
-23/32nds
TY M9 (US 10 YRS)
121.125
121.130
120.010
120.085
-24/32nds
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.
