ECONOMIC DATA 03/20/2009: all times EST
NO MAJOR ECONOMIC RELEASES. FED CHAIRMAN BERNNAKE SCHEDULED TO SPEAK.
ECONOMIC DATA 03/19/09 US WEEKLY JOBLESS CLAIMS (646,000 vs. 654,000)10:00 AM: US LEADING INDICATORS (-0.4% vs.-0.6%), US PHILLY FED SURVEY (-35.0 vs.-38.0) EIA INVENTORY (NATURAL GAS) (-30 BCF VS. -112 BCF) US 2 YEAR, ($40 B) 5 YEAR NOTE ($34 B) ANNOUNCEMENT.
U.S. TREASURIES POSTED A MIXED SESSION AFTER HISTORIC RISE. LONG END OF YIELD CURVE HOLDS GAINS ON PERCEPTION FED HAS ESSENTIALLY PUT CEILING ON RATES THROUGH PURCHASE PLAN.
U.S. Treasuries posted a divergent session after the largest one day rally in treasury futures ever. The long end of the yield curve, particularly the 30-year futures staged early gains as overseas buyers purchased Treasuries that essentially have been given a new lease on life after the FOMC meeting announcement that the Federal Reserve would be adding over a Trillion dollars worth of obligations to its balance sheet. The additions are to include $300 billion of Treasury long term debt. Establishing its position as a back stop for Treasury debt purchases allowed for an overnight and early rally in the government debt futures. Data releases today offered mixed signals for Treasuries as leading indicators and the Philadelphia Fed Survey both showed continued negative sentiment with regards to the employment and manufacturing in the United States. Both of the indicators did come in slightly better than forecast.
It would appear that the notion of the Federal Reserve enacting a plan that essentially puts a ceiling on rising yields drove buyers of Treasuries to seek out the long end of the yield curve to obtain the highest current yields as well as take advantage of the perceived uptick in demand on new mortgages and loans. The shorter end of the yield curve came under additional pressure after the announcement of nearly $130 billion worth of Treasury Debt, including $70 billion of 2 and 5 year notes, scheduled to come to auction.
Technically, June 30 years appear to be pulling back to settle into a less volatile channel for the moment. This could signal that the move higher could have elements of a technical retracement. A support level appears to be forming at 128.180. Further upward moves should develop momentum toward an initial resistance point of 130.240, with a move through here allowing for a setup toward the 131.160 level.
US DEBT FUTURES
OPEN
HIGH
LOW
CLOSE
CHANGE
US M9 (US 30 YRS)
129.160
131.075
128.270
129.150
+6/32nds
TY M9 (US 10 YRS)
124.285
125.160
124.140
124.170
-25.5/32nds
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.
