ECONOMIC DATA 02/25/2009: all times EST. 10:00 AM US EXISTING HOME SALES (4.80 MILLION). 10:30 AM EIA INVENTORY (CRUDE, PRODUCTS). 1:00 PM US 5 YEAR NOTE AUCTION ($32 BILLION)
RESULTS FROM 02/23/09
CONSUMER CONFIDENCE NUMBER (25.0 VS 35.0 EXP) US 2 YEAR NOTE AUCTION ($40 BILLION, BID TO COVER 2.63, YIELD .961%)
US TREASURIES POST SLIGHT LOST AS RALLY IN EQUITIES OVERSHADOWS BETTER THAN EXPECTED RESULTS FROM RECORD US 2 YEAR NOTE AUCTION.
US Treasuries rolled between gains & losses today, taking cues from the direction of equities which staged a massive rally on value searching after Monday's drop to indices levels last seen in 1997. Treasuries initially gained strength as record drops in consumer confidence & home prices for December 2008 gave the markets the indication of continuing down turns for the economy. Gains were short lived as the rally in equities gained momentum, taking away resources from markets which have been used as hedges or security from the recent downturns in the markets. Gold, US dollars and Treasuries all gave up recent gains as the markets regained its appetite for risk & drove equities higher. The shorter end of the yield curve took the brunt of the session's losses, as higher yields kept the 30 year bond near unchanged by the end of the session.
A better than expected result in the US 2 year note auction failed to bolster support for Treasuries in the wake of positive momentum in equities. Results of the record $40 billion offering posted a yield of .961% and a bid to cover ratio of 2.63. The bid to cover was significantly higher than the average 2.33 for the 2 year and shows that the shorter end of the yield curve continues to gain support for what is expected to be the minimum amount of time it will take to fund the recession/ recovery cycle currently experienced by the US.
Technically, March 30 year futures appear to have flat lined within their recent trading range. The positioning of 30 & 60 min RSI seems to be setting the market to trade higher to fill in gap left from 128.10. If this gap is filled, look for downward movement to find support at 126.28, with upside resistance at 12824, with further upside to 131.230
US DEBT FUTURES
US H9 (US 30 YRS)
TY H9 (US 10 YRS)