ECONOMIC DATA 06/03/09: all times EST
8:15 AM: ADP EMPLOYMENT REPORT
10:00 AM US FACTORY ORDERS (1.1%) , ISM NON-MFG INDEX (45.0)
10:30 AM EIA PETROLEUM (CRUDE, PRODUCTS)
SUMMARY OF DATA 06/02/09
PENDING HOME SALES INDEX (90.3 VS. 84.6: 6.7% VS. 3.2%)
U.S. TREASURIES GAIN AS BARGAIN HUNTERS TAKE ADVANTAGE OF HIGHER YIELDS, TECHNICAL RESISTANCE TRIGGERS INTEREST IN BUYING AS RISK TOLERENCE HEADS OUT FOR SUMMER VACATION.
U.S. TREASURIES gained on speculation that recent sell offs in U.S. government securities may be reaching oversold technical points, creating purchasing interest at 2009 yield highs, particularly in the long end of the curve which has steepened to a point where the price of U.S. 10-year futures has surpassed the U.S. 30-year. Additional support for Treasuries appeared after comments from Paul Volker suggested that true economic recovery “the next hot thing” is years away. Supply concerns and economic uncertainty continue to act as opposing forces on the price and yields of US government securities.
The mitigating force upon Treasuries downward momentum should likely be the desire for traders and investors to price in a summer rest. This should reintroduce a modest version of the flight to security sentiment as support levels increase in frequency, creating a narrowing range channel for Treasuries to trade within during the summer. A number of markets appear to be reaching their technical limits, so range trading across a number of commodity markets is likely to ensue.
Technically, September 30-year bonds are setting up to range trade, with the market setting up an upward resistance target of 116-12. Market should be implementing a series of lower highs for the near term. Support for the market sets in initially at 114-25, with a break of 114-03 implementing a renewal of strong downward momentum to the 112-05 level.
US DEBT FUTURES
OPEN
HIGH
LOW
CLOSE
CHANGE
US U9 (US 30 YRS)
115-000
115-180
114-140
115-110
+25.0/32nds
TY U9 (US 10 YRS)
115-210
115-315
115-065
115-190
+5.5/32nds
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.
