Speaking of bumpy air, trespassing, and the forgiveness of debt, the Greek/German tragedy of midsummer seems to have landed on terra firma for at least a few months—although inevitably the weakness of the Eurozone with its common currency, but disparate fiscal philosophies, spells renewed turbulence in financial asset markets.
The September 2015 Treasury Bond contract captured a 7th consecutive new session high early this morning. As such, the contract is slightly stretched. There is little else that says the bullish advance might be in danger of terminating.
In early trade today, Treasuries show short end weakness and the long end higher with a stronger dollar and lower commodities prices. Light volume attended trade yesterday and open interest declined in Fed Funds, Eurodollars and Ultras (-4K, -28K, -5K) while increasing in FV, TY and US (+18K, +27k, +6k).
The U.S. Treasury Department on Tuesday sold $25 billion of one-year T-bills at an interest rate of 0.330%, the highest since June 2010 and above the 0.290% posted at the last one-year auction held in June.
The U.S. Comex gold futures fell 0.48% last week and dropped a further 0.38% this week to $1,153.50 on Tuesday. The implied volatility of the gold futures has been falling from 21% in January to 11.5% currently in line with the decline in prices.