ECONOMIC DATA 05/01/09: all times EST
9:55 AM- UNI OF MICH CONSUMER SENTIMENT (61.9)
10:00 AM –ISM MFG INDX (38.3), US FACTORY ORDERS (-0.5)
SUMMARY OF DATA 04/30/09
U.S. PERSONAL INCOME (-0.3 VS.-0.2%), CONSUMER SPENDING (-0.2 VS.0.0), EMPLOYMENT COST INDEX (0.3 VS.0.5), WEEKLY JOBS CLAIMS (631K VS. 640K) CHICAGO PMI (40.0 VS.35.0) EIA NAT GAS INVENTORY REPORTS (+82 BCF)
U.S. TREASURIES POST QUIET SESSION, CAPPING OFF ONE OF THE WORSE LOSING MONTHS FOR U.S. GOVERNMENT DEBT ON SUPPLY CONCERNS
U.S. Treasuries traded in a quiet session as mixed economic data, an “acquittal” verdict with regards to better than expected earnings, and the declaration of bankruptcy by Chrysler Motors essentially pigeonholed Treasury futures into a narrow range as the market posted the worst returns of any sovereign debt in the world during the month of April. The gains achieved from the historic spike of Treasuries after the March FOMC have faded in the wake of ongoing record levels of supply coming to market, less than aggressive implementation by the Federal Reserve of its debt purchase program, and signs that the recession pressures may be starting to ebb.
This last element has been brought to light most recently by Wednesday’s FOMC meeting statement. The committee announced it would not be increasing the purchase levels of Treasury debt, stating that signs of improved credit flow and recession recovery have become evident. For these reason, other investment vehicles that appeal to higher levels of risk tolerance (corporate debt, equities, and commodities) as well as other sovereign debt have found more favor with buyers. With the better than expected earnings season coming to a close, Treasuries are likely to find support as sentiment turns back toward the longer term problems of unemployment and questions regarding sustainability of global consumer purchasing ability.
Technically, June 30-year futures continue within its newly established downward trend. Ahead of the weekend and next week’s unemployment figures, expected a retracement back up toward the 123-03 level. A significant level of resistance sets up at 123-16. Support for the market sets in at 121-30, with a break of this level setting the market up for an initial downward target of 120-24.
US DEBT FUTURES
OPEN
HIGH
LOW
CLOSE
CHANGE
US M9 (US 30 YRS)
122.235
123.000
121.310
122.180
-6/32nds
TY M9 (US 10 YRS)
121.010
121.080
120.175
120.300
-6/32nds
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.
