ECONOMIC DATA 05/14/09: all times EST

· 8:30 AM US CPI (0.0%, 0.1% EX ); EMPIRE STATE SURVEY (-12.0)

· 9:15 AM INDUSTRIAL PRODUCTION (-0.6%)

· 9:55 AM US CONSUMER SENTIMENT (67.0)

SUMMARY OF DATA

US PPI (0.3% VS. 0.1%, 0.1% EX); US WEEKLY JOBS CLAIMS (631K VS.609K)

EIA INVENTORY #'S (NATURAL GAS 95 BCF (0))

US TREASURIES TRADE HIGHER IN QUIET SESSION, FED BUYING CONTINUES TO OFFER SUPPORT DURING AUCTION HIATUS.

US Treasuries traded slightly higher in Thursday's quiet session. Data on inflation and employment was relatively benign for Treasuries. The Federal Reserve purchased about $3 billion of short term notes during the session today as well. While this would be considered a relatively small purchase, it managed to offer a sense of support to a market that is currently without its major negative influence of supply concerns. These concerns have been subdued as Treasury auctions are currently on hiatus until May 26 th .

Treasuries have managed to rebound off of support as the market continues to view economic fundamentals as weak, despite signs of improvement. In addition, expectations for stepped buying by the Federal Reserve in an effort to keep lending rates near record low levels has offered incentive for Treasuries to stage a bounce off key support levels. The reprieve may be short lived however once the record auctions reignite debt supply concerns.

Technically, June US 30 year futures made another attempt to break resistance of 123-090.Resistance at this level remains strong and indications are that the upward move could be setting up to fail due to numerous levels of significant resistance between 123-09 and 125-12. If and when the current upward momentum fails, the market should pullback to an initial support level of 121-310. Initial downward target for the June contract is 118-220.

US DEBT FUTURES

OPEN

HIGH

LOW

CLOSE

CHANGE

US M9 (US 30 YRS)

122-235

123-130

122-145

123-035

+5.5/32nds

TY M9 (US 10 YRS)

121-200

122-020

121-155

121-215

-2.0/32nds