1:43 am - Gobbling New Highs: Treasuries continue to run higher, tacking on new records on the 10-yr yields, but all with a couple of mitigating circumstances coming into play, including the current, unprecedented levels, depleted size, restrained general activity in credit markets and the calendar roll into Mar in futures contracts. The day's data remained on the abysmal track, with the
confidence measures sitting near levels last seen around 1980 and spending cratering along with new home sales and durable orders twice as bad as expected. The market has been running on empty for the most part of the month, and with the holiday season officially on, things will only get worse, and therefore more volatile. Price pressure will derive from the overbought situation as well as concerns about "what is and what is not a âgovernment' guarantee." The fact remains, however, that "everybody wants their treasuries," notes a life long dealer, as "they're reaching for duration and cause they have to have something on their books for safety." The 10-yrs run up to tag a record 2.984%, which according to Steve Orfanos at Orfanos Research and Trading, compares--although not in a tangible way-- to levels last seen in 1955, when a 20-yr issue yielded 2.68% on a monthly basis. The curve remains flatter, after a few unwinding driven pushes, with the
2-10-yr yield spread at 188.6, near the Oct's opening levels. On the positive side of the ledger,
initial jobless claims were down and personal income was up, sort of, but the negative side held sway as
durable orders plunged along with new home sales, personal spending and Chicago manufacturing. The dollar has strengthened into the early close but trade is thin and with stocks shrugging off the bad data, the buck could reverse course in short order. Spot gold is off at 812.45 (-8.60) while crude is holding higher at 52.94 (+2.17) despite a massive build in inventories. Financial futures close at 13.
11:16 am - Nosebleed : The continuous 10-yr futures is orbiting deep space with gravity left far behind. Prices continue to work the topside after removing Thurs record highs of 121-25+. The session has notched 122-24 with little resistance beyond profit taking. A channel top and psycho figure resistance awaits near 127. The soon-to-be front month Mar contract is getting a jump on its roll with holiday trade but it is confirming the new highs... which is good.
Mar contract
10:47 am - YOY Yikes! New homes sales continue to drop but the percentage decline yoy (albeit from sky high levels) picked up pace in Oct after 2 month's of modest improvement. Total sold dropped over 40% from Oct 07 following Sep's -32.1% and Aug's -35%. Median prices plunged 7.0% from Oct 07 not quite as bad as Sep's -7.7%. Ugly rates of decline by any standard and suggest prices have a ways to go before a bottom can be discussed with any reasonable conviction.
10:27 am - Ding!Ding!Ding!:Trade has resumed its run better with the 10-yr taking out its historic low yield to tag 2.984%, but the volume died as soon as we got there.
10:16 am - At 3%: The data was bad, across the board, with the UofM hitting at the low 55.3 worst since 1982, with an increasingly poor outlook of 53.9. The Chicago PMI also saw the worst level since 1980, hitting at 33.8 with all the relevant inputs tanking and employment at 33.4 from 41.5. The new home sales report saw a drop of 5.3% to 433K with a bump in inventories to 11.1 from 10.9 months supply still on the shelf. Bonds continue to try to grind higher, but gravity is working against prices.
10:12 am - Buck Punches Back : The dollar is fighting back after the euro's swing at 1.31 whiffed. Corrective sentiment that fueled position squaring on stale buck longs and maybe a little euro and pound short squeeze thrown in for good measure has propelled trade the last few sessions and that looks to have run its course for now. The euro will need to crack 1.31 before momentum returns. The data were awful but that was widely expected and may be contributing to the waning positive sentiment in stocks which looks to fuel further yen and dollar gains into the holiday. The
euro has support 1.29 short term with more near 1.2790. Offers are pinning the topside near 1.3020. Against the yen, the dollar is pivoting 95 with a slight directional bias toward the yen. Above 97.50 or below 93.50 will be needed to really get things rolling. The pound is unwinding its gains this week with 1.5535 capping its recovery attempt. A close back below 1.5180 will drag momentum negative and trade will eye a ret-test of 1.4560. Spot gold is falling off at 814.10 (-6.95) while crude is trying higher at 51.87 (+1.10).
10:03 am - Trade Slow: The market has been reluctant to take on its rally responsibility, perhaps in part due to the lack of size as well as the lack of downside. There is a ceiling of sorts, but once they get 10-yr yields back to a 2 handle, where's the value? The 2.988% level is looming large and once broken has gapping potential with the next stop near 2.95%. Data keeps hitting and has been nothing but bond positive, with the confidence numbers were awful, so a further run is possible.
09:46 am - Cash from System : Fed drains $25B via 2-day reverse repos.
09:17 am - Back and Forth: Bonds are trying to come back from the post data sell off, which was pretty lame anyway, and the 10-yr headed back to the 3.1% level. The curve has been working a bit steeper, but remains near the flattest since the start of Oct. Trade has shriveled, however, and once again, as has become the norm, slowed to a snail's pace so any swings are likely unsustainable.
08:45 am - Rally Briefly: The data hit pretty badly with poor revisions to boot. The
initial claims hit at an improved 529K although there was an minor upward revision to 543K from the big 542K. The income and spending data, with
income getting a bounce of 0.3% but remains low (what's in your wallet?) against an also worse revision (0.1% versus 0.2%) while
spending tanked with a -1.0% drop in spending meeting with expectations, the hilarious
durables way off at -6.2% with a massively wrong revisions to -0.2% against the previously reported 0.8%.
08:26 am - Swiping at Highs : The market is
brushing up against intraday record highs as trade picks up a bid ahead the Thanksgiving holiday and stocks run out of steam. Europe is injecting $260B of stimulus and China slashed rates but that failed to rally sentiment.
Thin trade is dominating and expected bad data due is likely giving loft to already lofty prices. The
2-10-yr yield spread is flatter at 190 as investors continue to grab yield out the curve on diminished inflation fears, Bond prices in the EuroZone found some dip buyers with help from really bad Italian business confidence while in Japan, bonds jumped while stocks stumbled ahead of expected bad data. Treasuries have a big batch of middling data to slog through in today's shortened session. Supply is done and prices perked up a bit after yesterday's decent 5-yr showing. Trade looks to be consolidating last week's break out price gains with about 2.988% the low water mark for the 10-yr yield since the Fed began keeping records in 1962 (Bloomberg). If data goes the way of expectations that level looks to be tested today. The dollar is grabbing back some lost ground with the euro failing to test 1.31. Trade is bailing on the run up already with ranges coming back into play below 1.2980 through 1.2785. Meanwhile, the yen has wedged itself between 94.20 and 95.50. Gold has retained its bid, but has backed off some into the open with spot running 811.83 (-9.22). Crude has buyers on expected demand increases ahead of inventories now 51.75 (+0.98).The calendar is hopped up with low level data like a
pushed up initial claims, durable orders, personal income/spending (8:30) and Chicago PMI (9:45) and UofM revisions and new home sales (10).
07:58 am - Mortgage Applications : The weekly MBA mortgage applications index perked up 1.5% last week with refis down 2.1% and purchasing applications up 5.3%. The fixed 30-yr mortgage rate dropped to 5.99% (-18 basis points) while the 15-yr fell to 5.78% (-9 bps) & 1-yr adjustable rate mortgages rose to 6.87% (+7 bps).
non condivido tutto ma è un post strutturato e motivato che ha una sua valenza e da cui mi farò anche se solo parzialmente influenzare.