1:52 am - Bills: Treasury's 4-wk draw 0.050% with a 3.40 bid to cover
11:49 am - General Fear: The downdraft on bonds will continue to lead trade while the market waits to see how the auction shakes out. The 10-yr will have support near the 2.759% level, with the 50 and 100 day moving averages meet, and will likely take a crack at it in the thinned trade. The combination of supply and inflation is leaning on prices, while general fear lends support (in the library with a bat and a candelstick).
11:28 am - PPIF: Treasuries have been slipping in lightening action with the auction on tap, an improvement in a home pricing measure and the general up-tick in supply all weighing. The market will be keeping a peripheral eye on the 800 level in the S&Ps, but the stocks will be merely as add-on to the pressures already in place. The ongoing talk of the PPIF, or as it appears to have morphed, PPIP (guess the sound of the air rushing out of a balloon was none too appealing) has given rise to a less fearful environment, as did yesterday's equity rallies. The curve has been run well steepened back to levels seen ahead of the news that there will be buying in treasuries. The 2-10-yr yield spread is trading 178.8. Global bonds are adding to drag as the UK's upside surprise on inflation adds to general bond pressure.
10:38 am - Still Stifled by Supply: The market was pulling back, but continues to labor under significant supply pressure as the week's first major US auction in the era of the PPIP hits along with added sovereign and corporate offerings, FDIC guaranteed or not. The fact that China says they are still on the bond buyside is nice and all, but the fact is, as their influx of dollar's drops amid a slowing global economy, so will their interest in buying bonds.
10:03 am - Buck Up: The dollar has caught a bid and is generally higher, losing some ground on the pound as talk of scaling back the island's "quantitative easing" bounced yields higher. The buck has been giving back some of the early gains on the euro, although not by much, with the regional currency clawing back to the 1.3550 level. Trade should be fairly tame with nothing much to push it and the anticipation of the latest details in an ever changing game induces some cautious trade. The yen remains on offer and has reached back into the pre-Fed's buying bonds outright territory. Trade may get caught between 98.20 and 98.85 area, near its recent worst levels and with some key price points recently plowed through. BBH's Mard Chandler noted that over the 97.60 level will "get players talking about JPY100 again."
09:20 am - Really?: Bonds have been sneaking back a bid, with the prerecorded testimony from Bernanke and Geithner goes out. The market will not be played by the words of officials without some names and numbers to go with them, specifically regarding the FedâÂÂs treasury buyback program. That they will even pull the trigger on that move is in question, but the market will be jolted on any specific news in that direction. Sell $40B 2-yrs todayâ¦buy $40B 2-yrs todayâ¦
09:05 am - Pressured: The market is on the defensive and has been trying to pull back as stocks have shown some slippage. The day's kick-off (post the new plan) auction, $40B 2-yrs will set off the week's $94B in 2-7-yrs, which is about the duration area the Fed is looking to come in and buy. Libor set higher for the first time in almost 2-wks, most spreads continued to come in. The market will likely spend its day ticking to the downside while eyeing stocks but will be more concerned over the auction, emerging details on bailouts and buybacks while being on watch for any more news on the Fed's bond buying binge beginning.
08:33 am - Sold Off on Supply and Relief: The market continues to get a
mechanical sell off, with the Federal Reserve poised to come in to buy the middle of the curve, any selling will be tempered. The long bond will continue to suffer as they are not invited to the buying party and are also getting added pressure from the heightened inflation concerns. The day has little and will likely see lower prices amidst tame trade with the
$40B 2-yr auction going late and will be the first major offering in the latest environment with the newest of the new schemes on tap. The auction should go fairly well, but players are nervous and will be watching the tail. The curve has been sloped well steeper with the
2-10-yr yield spread at 180.1, while still well flattened since the treasury buying news and off the flats from Thursâ 165. The buck has been bid as talk of lower rates in the EuroZone filters through and the potential of success with the latest rescue plan gains some currency. The euro has been knocked off over 1.5% from its early Mon highs, but likely to range in the 1.35 to 1.36 area. The yen has been pushed off the 97.00 point it had been clinging to on the buck but has taken back some ground on the euro, after recent 5-mo highs see some clean-up. Gold continues to suffer as safe haven players are sucked out of the action, with spot running 924.60 (-14.90). Crude is giving back some of the recent demand optimistic gains and the buckâÂÂs resurgence, now 53.11 (-0.69). Big Fed-speak up has
Bernanke and Geithner
cinesi zitti e comprate bonds
