BUND,T-BOND,T-NOTE, e altre cose strane (vietato a....)
- Creatore Discussione Noooo
- Data di Inizio
gastronomo
Forumer storico
DJ Debt Futures Review: Short End Weakens As Flattening Continues
By Allen Sykora
BEND, Ore. (Dow Jones)--Eurodollar and two-year note futures finished
lower while 10-year notes and 30-year bonds finished slightly higher Monday,
on a flattening of the yield curve in anticipation of more Fed rate hikes
going forward, strategists and traders said.
Weaker energy prices contributed to the move.
Dec 10-year notes settled up 2 ticks at 112-14.5, while Dec Treasury
bonds gained 6 ticks to 112-18. However, Dec two-year notes slipped 1.7 ticks
to 105-10.2, while Jun Eurodollars lost 5 basis points to 96.92.
"We have a little flattening of the curve," said Gerald Lucas, chief
Treasury and agency strategist in New York for Banc of America
Securities. "Otherwise, we haven't had a whole lot of activity.
"We had a fair amount of activity in the corporate market, and some of
that may be weighing on the Treasury market."
The curve-flattening is part of a longer-term trend due to ideas the
Federal Reserve will be continuing to tighten monetary policy, he said.
Officials last week upped the federal-funds rate by 25 basis points to 2.0%.
"The curve is just incessantly flattening," said Alex Manzara, vice
president in Chicago with Refco. "Anybody who is long the curve - long the
nears and short the back - is just getting crushed."
Not only is the two-year to 10-year curve flattening, but so is the
Eurodollar curve, Manzara pointed out.
"The reds (Eurodollars for the second year out) are down on average 3.5
basis points," he said. "The blues (fourth year out) were up 2 basis points.
And the golds, the fifth year out, were up 3.5 basis points.
"All of the weakness was concentrated on the short end of the market."
The continued retreat in crude oil is adding to the pressure on the
market, especially for shorter-dated maturities, explained Manzara. Dec crude
lost 45 cents to $46.87 but at one point traded down as far as $45.25, down
more than $10 from last month's $55.67 contract high.
"We had a little bit of a sell-off in crude oil. That makes it easier
for the Fed to hike," said Manzara.
Now that energy prices are not so high, there are less worries about
soaring energy costs slowing economic momentum and doing some of policy-
makers' work in keeping the economy from heating up too much.
The continued flattening of the curve appears to be due to those who
already have flattening trades continuing to press the market, as well as
those on the other side of the market exiting out of their positions, said
Manzara.
The Jun Eurdollars fell as far as 96.91, their weakest level since Aug.
4. Furthermore, they closed a tick below the key chart level of 96.93, which
was the 50% retracement of their rise from the June low to the September high.
Dec 10-year notes remain above their nearby support levels - last week's
low of 111-28.5 and the Oct. 5 low of 111-16, which was the market's lowest
price since early September.
Much of the focus the next two days will be on inflation data.
The Producer Price Index is scheduled for release at 0730 CT (1330 GMT)
Tuesday. The forecast is for a rise of 0.6% in overall PPI but a gain of
just 0.1% for core PPI excluding food and energy.
The Consumer Price Index is slated for release Wednesday. Expectations
are for an overall rise of 0.4% and a core increase of 0.1%. Housing starts
and industrial production are also on the calendar for Wednesday.
Monday morning, the headline index in the New York Federal Reserve's
Empire State Manufacturing Survey rose to 19.76 in November from 17.43 in
October. The forecast had been for a reading of 20.5.
-By Allen Sykora; Dow Jones Newswires; 541-318-8765;
[email protected]
(END) Dow Jones Newswires
By Allen Sykora
BEND, Ore. (Dow Jones)--Eurodollar and two-year note futures finished
lower while 10-year notes and 30-year bonds finished slightly higher Monday,
on a flattening of the yield curve in anticipation of more Fed rate hikes
going forward, strategists and traders said.
Weaker energy prices contributed to the move.
Dec 10-year notes settled up 2 ticks at 112-14.5, while Dec Treasury
bonds gained 6 ticks to 112-18. However, Dec two-year notes slipped 1.7 ticks
to 105-10.2, while Jun Eurodollars lost 5 basis points to 96.92.
"We have a little flattening of the curve," said Gerald Lucas, chief
Treasury and agency strategist in New York for Banc of America
Securities. "Otherwise, we haven't had a whole lot of activity.
"We had a fair amount of activity in the corporate market, and some of
that may be weighing on the Treasury market."
The curve-flattening is part of a longer-term trend due to ideas the
Federal Reserve will be continuing to tighten monetary policy, he said.
Officials last week upped the federal-funds rate by 25 basis points to 2.0%.
"The curve is just incessantly flattening," said Alex Manzara, vice
president in Chicago with Refco. "Anybody who is long the curve - long the
nears and short the back - is just getting crushed."
Not only is the two-year to 10-year curve flattening, but so is the
Eurodollar curve, Manzara pointed out.
"The reds (Eurodollars for the second year out) are down on average 3.5
basis points," he said. "The blues (fourth year out) were up 2 basis points.
And the golds, the fifth year out, were up 3.5 basis points.
"All of the weakness was concentrated on the short end of the market."
The continued retreat in crude oil is adding to the pressure on the
market, especially for shorter-dated maturities, explained Manzara. Dec crude
lost 45 cents to $46.87 but at one point traded down as far as $45.25, down
more than $10 from last month's $55.67 contract high.
"We had a little bit of a sell-off in crude oil. That makes it easier
for the Fed to hike," said Manzara.
Now that energy prices are not so high, there are less worries about
soaring energy costs slowing economic momentum and doing some of policy-
makers' work in keeping the economy from heating up too much.
The continued flattening of the curve appears to be due to those who
already have flattening trades continuing to press the market, as well as
those on the other side of the market exiting out of their positions, said
Manzara.
The Jun Eurdollars fell as far as 96.91, their weakest level since Aug.
4. Furthermore, they closed a tick below the key chart level of 96.93, which
was the 50% retracement of their rise from the June low to the September high.
Dec 10-year notes remain above their nearby support levels - last week's
low of 111-28.5 and the Oct. 5 low of 111-16, which was the market's lowest
price since early September.
Much of the focus the next two days will be on inflation data.
The Producer Price Index is scheduled for release at 0730 CT (1330 GMT)
Tuesday. The forecast is for a rise of 0.6% in overall PPI but a gain of
just 0.1% for core PPI excluding food and energy.
The Consumer Price Index is slated for release Wednesday. Expectations
are for an overall rise of 0.4% and a core increase of 0.1%. Housing starts
and industrial production are also on the calendar for Wednesday.
Monday morning, the headline index in the New York Federal Reserve's
Empire State Manufacturing Survey rose to 19.76 in November from 17.43 in
October. The forecast had been for a reading of 20.5.
-By Allen Sykora; Dow Jones Newswires; 541-318-8765;
[email protected]
(END) Dow Jones Newswires
Similar threads
