SUMMARY OF DATA
04/16/09 US HOUSING STARTS 510K VS.570K, US WEEKLY CLAIMS (610K VS. 657K), PHILIADELPHIA FED SURVEY (-24.4 VS -30.2), EIA NAT GAS INVENTORIES (21 BCF VS. 20 BCF)
US TREASURIES PULLBACK CONTINUES AS SIGNS OF ECONOMIC STABILITY, SMALL FED PURCHASE OF TIPS TURNS FOCUS BACK TO EXTRAORDINARY SUPPLY OF OBLIGATIONS.
US Treasuries pulled back for a second session after economic data releases for Thursday demonstrated signs that the US economy may be finding points of stability. New unemployment claims for the week came in lower for the first time in nearly two months and the reading of business sentiment from the Philadelphia Federal Reserve region showed a better than expected reading. These signs of stabilization and a relatively small purchase of TIPS (Treasury Inflation Protection Securities) by the Federal Reserve revived concerns regarding the enormous supplies of current and future debt that the financial system will have to absorb. Additional concerns regarding US Treasury Debt are beginning to emerge from the realm of global competition. Plans by the European Union and other regions to undertake “non standard” means to boost economic activity will likely mean extraordinary amounts of new debt obligations coming into the marketplace.
Treasuries came under pressure point today after the US government announced that the results of “stress tests” for 19 major US banks would be released by May 4th. The move should alleviate some of the uncertainty which has been plaguing the markets, creating some pullback by those that sought relative security of government debt. All of these elements combined today to make the perception of Treasuries shift once again toward that supply issue.
From a technical perspective, little change as the market continues to range trade.(this statement is becoming as tedious for me to write as it is for you to read). Today’s closing level has brought the 125.120 support level back into view of the scope. If this level breaks, the next target level should be 123.180. Resistance continues to hold at 128.145.
US DEBT FUTURES
US M9 (US 30 YRS)
TY M9 (US 10 YRS)