Treasury notes dropped in value on Thursday as traders made the move to riskier assets from bonds, following the path of least resistance on the day by moving yield values lower. The markets asked the question of why 0.9% was enough interest to earn to easily warrant holding notes, especially when equities were able to move higher. The Treasury market moves lower moves came after U.S. based economic reports showed some improvement in outlook and growth, albeit tentative. The massive amount of Fed buying at recent auctions also weighed on sentiment in the bond market on Thursday it seems.
The Federal Reserve sold a record number of new-issue notes last week, and created another mass of dollar backed Treasuries for the market to absorb. The Fed continued it short-dollar mandate by buying $7.3b of U.S. debt this week, in its ninth buy-back operation since March 25th. There are many more Treasury auctions to come, and if equity markets find buyers it may be that the dollar denominated reserves may start to lose value.
Crude oil for May delivery was pushing into major a major swing point at $50, up by over 1.5% on the day, with a $1.50 loss. The 4 hour crude chart shows very little interest it seems for speculators to take things outside of the channel range that has been in place for four weeks now.
Gold for May delivery was recently trading down $18.80 (-2.1%) at $875 per ounce. Bullion held in the SPDR Gold ETF remained close to a record 1,120 metric tons, and all eyes will now be on the 05:30 EDT London fixings for bullion on Friday.