ECONOMIC DATA 06/17/09: all times EST
8:30 AM US CPI (0.3%, EX 0.1%)
10:35 AM EIA INVENTORY REPORT (CRUDE, PRODUCTS)
ECONOMIC DATA 06/ 16/ 09
US HOUSING STARTS (532K VS 500K)
PRODUCER PRICE INDEX (0.2 VS. 0.7, EX -0.1 VS, 0.1)
INDUSTRIAL PRODUCTION (-1.1% VS -1.0%, CAPACITY UTIL 68.3 VS. 68.4)
U.S. TREASURIES TRADE HIGHER AFTER DATA SHOWS CONTINUED CRACKS IN RECOVERY PICTURE. FEDERAL RESERVE STEPS UP PURCHASES.
Treasury futures continued higher for a second session after data on producer prices and industrial production offered an opposing view to the notion of a robust recovery by the end of the year that would fuel the need for the Federal Reserve to adopt a rapid turnaround with regards to its stimulus rate policy. U.S. Producer Price Index posted a smaller than expected increase of 0.2%, with the core rate (excluding volatile components of food & energy) actually posting a decline of -0.1%. U.S. Industrial Production slowed a greater than expected -1.1% while President Obama’s near assurance of an 10% unemployment rate fueled demand for fixed income which drove yields to their lowest levels in two weeks.
Treasuries also received a boost as the Federal Reserve stepped up its purchases of US three-year notes to $6.5 billion. U.S. three-years remain a standard for measuring the expected risk recovery cycle of the current credit/ financial crisis. The long end of the curve benefited the most today as subsiding inflation pressures, buying at perceived yield values, and changing sentiment that the recovery will likely take longer and run into more challenges along the way than many expected.
Technically, US 30-year futures continue to retrace from their low, volatile spike of June 11th. The market appears to be setting a new range which should find significant resistance at 117-18. The recent upward recovery trend should find a near top at 116-15 before setting up for a downward pullback to 114-20.5.
US DEBT FUTURES
OPEN
HIGH
LOW
CLOSE
CHANGE
US U9 (US 30 YRS)
114-260
116-000
114-260
115-220
+17/32nds
TY U9 (US 10 YRS)
114-140
115-055
114-140
115-025
+8/32nds
Prepared by Rich Roscelli & Paul Brittain.
EMAIL QUESTIONS OR COMMENTS TO RICH@BINVSTGRP.COM
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