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!
While the Treasury market looks to come in above the prior two closes on the charts, the trade is probably hesitant to drive prices sharply in either direction ahead of the FOMC statement that will be released later today. In fact, with the FOMC statement today expected to be accompanied by individual Fed member interest rate forecasts and perhaps by inflation targets, many traders might take a wait and see attitude. However, some Treasury market support might be present this morning from the Euro zone situation, which in turn might be fostered by the avalanche of Press commentary flowing from the Davos conference as that coverage has tended to focus on the negatives from Europe.
The US Treasury market garner some support from news that the UK 4th quarter GDP was negative and also because that reading was slightly below market expectations, as that in turn seemed to keep the fear of a global recession alive. On the other hand, the BOE MPC voted 9-0 to keep its QE efforts unchanged and they also suggested that there was a slightly reduced nearer term threat of a sharp contraction.
In looking ahead to the scheduled US data flows today, market expectations call for a minor contraction in pending home sales figures. Following the home sales release will be an 11:30 AM FOMC statement release, a mid day auction of $35 billion in 5 Year Notes and then a 1:15 Fed Press conference.
With the new format from the Fed offering additional information, it is difficult to predict the reaction in Treasury prices, especially with the rate and inflation forecasts lacking historical reference. Also due out today, is a report on mass layoffs, which could attract some attention, as the flow of scheduled data recently has been a little thin. At least for the coming 8 hours, the focus of the Treasury trade is likely to increase its attention to events on this side of the Atlantic, especially since the Greek debt talks have seemingly returned to square one.
With weaker equities to start, steady demand for the auction yesterday and unresolved Euro zone issues, the bull camp might think that the recent lows are capable of holding up prices. On the other hand, a clean sweep of better than expected US scheduled data and overtly upbeat dialogue from the US Fed, could revive the bearish attitude that seems to have dominated the US Treasury markets since the January 18th highs.
Interest Rates: Expect a Bottom to Form After Fed News and 5Yr Supply
by Dave Hightower on January 25, 2012
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!
While the Treasury market looks to come in above the prior two closes on the charts, the trade is probably hesitant to drive prices sharply in either direction ahead of the FOMC statement that will be released later today. In fact, with the FOMC statement today expected to be accompanied by individual Fed member interest rate forecasts and perhaps by inflation targets, many traders might take a wait and see attitude. However, some Treasury market support might be present this morning from the Euro zone situation, which in turn might be fostered by the avalanche of Press commentary flowing from the Davos conference as that coverage has tended to focus on the negatives from Europe.
The US Treasury market garner some support from news that the UK 4th quarter GDP was negative and also because that reading was slightly below market expectations, as that in turn seemed to keep the fear of a global recession alive. On the other hand, the BOE MPC voted 9-0 to keep its QE efforts unchanged and they also suggested that there was a slightly reduced nearer term threat of a sharp contraction.
In looking ahead to the scheduled US data flows today, market expectations call for a minor contraction in pending home sales figures. Following the home sales release will be an 11:30 AM FOMC statement release, a mid day auction of $35 billion in 5 Year Notes and then a 1:15 Fed Press conference.
With the new format from the Fed offering additional information, it is difficult to predict the reaction in Treasury prices, especially with the rate and inflation forecasts lacking historical reference. Also due out today, is a report on mass layoffs, which could attract some attention, as the flow of scheduled data recently has been a little thin. At least for the coming 8 hours, the focus of the Treasury trade is likely to increase its attention to events on this side of the Atlantic, especially since the Greek debt talks have seemingly returned to square one.
With weaker equities to start, steady demand for the auction yesterday and unresolved Euro zone issues, the bull camp might think that the recent lows are capable of holding up prices. On the other hand, a clean sweep of better than expected US scheduled data and overtly upbeat dialogue from the US Fed, could revive the bearish attitude that seems to have dominated the US Treasury markets since the January 18th highs.
Tags: Bonds, Interest Rates, Notes
About Dave Hightower