ECONOMIC DATA 03/19/2009: all times EST
8:30 AM: US WEEKLY JOBLESS CLAIMS (654,000)
10:00 AM: US LEADING INDICATORS (-0.6%), US PHILLY FED SURVEY (-38.0)
10:35 AM: EIA INVENTORY (NATURAL GAS)
11:00 AM US TWO-YEAR, FIVE-YEAR NOTE ANNOUNCEMENT
ECONOMIC DATA 03/18/09 US CPI (CONSUMERS PRICE INDEX)(0.4%VS. 0.3%, EX FOOD & ENERGY 0.1%VS.0.2%)AM EIA INVENTORY REPORT (CRUDE +2.0, RBOB +2.1, DISTIL +0.1) 2:15 PM FOMC MEETING ANNOUNCEMENT (RATE POLICY LEFT UNCHANGED, FED ANNOUNCED THAT IT WOULD BE ADDING SUBSTANTIALLY TO BALANCE SHEET BY PURCHASING $300 BILLION LONG TERM TREASURIES)
U.S. TREASURIES SKYROCKET WITH HISTORIC JUMP AFTER FOMC MEETING OUTLINES PLANS FOR DIRECT PURCHASES OF TREASURIES AND AGENCY BOND TOTALING $1.15 TRILLION DOLLARS.
U.S. Treasuries posted a session for the ages, with June 30-year futures jumping nearly SEVEN FULL POINTS immediately after the announcement by the FOMC (Federal Open Market Committee) that it would enact a plan to directly purchase $300 billion worth of U.S. Treasury debt in an effort to maintain a low rate environment and support programs designed to clean up toxic assets and support stimulus programs. Equities found favor with the plan as well, rallying to two-month highs once the Fed actually delivered on the promise/threat back in December that it was considering the direct purchase of Treasury and Agency debt. The Federal Reserve by this move is expected to add $1.15 trillion to its balance sheet.
The decision to enact this aggressive policy, as well as maintaining interest rates unchanged, was voted on unanimously by the fiscal governing body. The implementation of quantitative easing- the policy of using direct injection of funds as the main stimulation tool- offers a concrete example of the Federal Reserve moving beyond its traditional strategies to apply a more hands on series of policies to deal with the economic crisis that may be seeing some signs of stabilization.
Technically, June 30-years futures- a tough call to make today. The spike upward to 132-18 could be revisited, as this represents a butting up of a resistance level at 132-26. If this spike represents a false break out, look for current resistance to form at 130-06. Support for a pullback should be found at 127-09.
US DEBT FUTURES
OPEN
HIGH
LOW
CLOSE
CHANGE
US M9 (US 30 YRS)
123.250
132.180
123.230
129.090
+5.015/32nds
TY M9 (US 10 YRS)
120.270
126.040
120.040
120.240
+4.125/32nds
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.
