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Apparently the Treasury market was lifted in the lead up to and through comments from the Fed’s Bernanke late in the prior trading session. While there didn’t seem to be a specific definition of the duration of easy money policies from the US Fed Chairman yesterday afternoon, he did suggest that the need for easy money policy was going to be in place for some time to come. It is somewhat difficult to measure the impact of any decision by OPEC to raise production of oil, as that could dampen inflation pressures, but at the same time that might be seen as a development that takes some of the drag off the global economy. Talk from another Fed member yesterday, suggesting that tightening doesn’t make sense in the face of an ambiguous recovery track also seemed to set the US Treasury market up for the low to high rally in September bonds yesterday of roughly 3/4 of a point. With at least two Fed members yesterday weighing in somewhat dovish, a speech by the Fed’s Hoenig later today might take on some added importance, as the equity markets yesterday afternoon seemed to be disappointed that Bernanke wasn’t more forthcoming with talk of additional easing. Given past views from Hoenig, many traders doubt that Treasury prices will be able to garner much lift in the wake of his comments into the last half hour of the pit trade today. Once again, there will be little scheduled report impetus in the morning trade, with the action likely to pick up pace into the mid day 10 Year auction results and into the early afternoon release of the Fed Beige Book. With the decline in Treasury yields yesterday that might raise the bar slightly on the 10 Year note auction today, which in turn might be hindered by Chinese comments yesterday, that they would be careful not to have too much exposure to US denominated investments. In short, the Treasury market has increased its attention to any reports on the slow pace of the US economy, as a portion of the Fed this week has acknowledged a measure of slowing in the US economy. In the absence of scheduled data from the US, the Treasury market is likely to take its direction this morning from the US equity markets, with the trade in the afternoon looking to Fed dialogue and the Beige book for guidance.
Interest Rates: US Economic Slowing Fears and Uncertainty
by Dave Hightower on June 8, 2011
Below is a sample of The Hightower Report’s Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!
Apparently the Treasury market was lifted in the lead up to and through comments from the Fed’s Bernanke late in the prior trading session. While there didn’t seem to be a specific definition of the duration of easy money policies from the US Fed Chairman yesterday afternoon, he did suggest that the need for easy money policy was going to be in place for some time to come. It is somewhat difficult to measure the impact of any decision by OPEC to raise production of oil, as that could dampen inflation pressures, but at the same time that might be seen as a development that takes some of the drag off the global economy. Talk from another Fed member yesterday, suggesting that tightening doesn’t make sense in the face of an ambiguous recovery track also seemed to set the US Treasury market up for the low to high rally in September bonds yesterday of roughly 3/4 of a point. With at least two Fed members yesterday weighing in somewhat dovish, a speech by the Fed’s Hoenig later today might take on some added importance, as the equity markets yesterday afternoon seemed to be disappointed that Bernanke wasn’t more forthcoming with talk of additional easing. Given past views from Hoenig, many traders doubt that Treasury prices will be able to garner much lift in the wake of his comments into the last half hour of the pit trade today. Once again, there will be little scheduled report impetus in the morning trade, with the action likely to pick up pace into the mid day 10 Year auction results and into the early afternoon release of the Fed Beige Book. With the decline in Treasury yields yesterday that might raise the bar slightly on the 10 Year note auction today, which in turn might be hindered by Chinese comments yesterday, that they would be careful not to have too much exposure to US denominated investments. In short, the Treasury market has increased its attention to any reports on the slow pace of the US economy, as a portion of the Fed this week has acknowledged a measure of slowing in the US economy. In the absence of scheduled data from the US, the Treasury market is likely to take its direction this morning from the US equity markets, with the trade in the afternoon looking to Fed dialogue and the Beige book for guidance.
Tags: Bonds, Financials, Interest Rates, Notes
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