Treasury yields soared following a better than expected employment report. Once again, the yield in the 10-year note seems to be approaching 4% and the 30-year bond reached the 4.64% area.
Although the job losses experienced last month would have been considered a disaster a few years ago, it seems like a blessing today. The change in non-farm payrolls came in at a negative 247,000 as opposed to the expectations of a 325,000 decline. As bad as the numbers are, they are a far cry from the loss of 600,000 plus suffered earlier this year. The unemployment rate also improved to 9.6%.
Also pressing on bond and note prices, President Obama claimed in a speech earlier today that the worst may be over. It didn't seem to add to the day's losses in Treasuries but it did fend off any chances of a recovery. Nonetheless, while the bond market was a bit reluctant to take the President at his word, equities had faith in the idea.
Next week will be data intensive. We will hear the most recent inflation figures, trade balance, retail sales and consumer sentiment.
Yesterday we mentioned the idea of an early morning sell-off on the announcement followed by a recovery. However, trade became heavy on the numbers and never recovered. On the other hand, the equity rally remained firm and remains highly directional. This may point toward some follow through of Friday's move into early next week. Therefore, although our objectives of just under 115 in the note, under 114 in the 5-year and the mid-114's in the 30-year bond (almost), it seems as though there may be a little room for the market to move on the downside. We would like to wait until Monday to see how things play out but in the meantime the next support lies at 113'20 in the long bond and 113'14 in the note.
Have a great weekend!
* Due to time constraints and our fiduciary duty to put clients first, the charts provided in this newsletter may not reflect the current session data. However, market analysis and commentary does. Charts provided by Track 'n Trade, Gecko software.
**Seasonality is already be factored into current prices, any references to such does not indicate future market action.
Treasury Bond and Note Option Trading Recommendations
**There is unlimited risk in naked option selling.
Flat
Treasury Bond and Note Futures Trading Recommendations
**There is unlimited risk in trading futures.
Flat
Eurodollar Futures Trading Recommendations
**There is unlimited risk in trading futures.
June 29 - Our clients were recommended to sell September Eurodollar futures while buying a 9937.5 call as insurance. The calls were getting filled near 7 ticks, and the futures near 9933. This makes the total risk on the trade at expiration $287.50 before commissions and fees.
Although the job losses experienced last month would have been considered a disaster a few years ago, it seems like a blessing today. The change in non-farm payrolls came in at a negative 247,000 as opposed to the expectations of a 325,000 decline. As bad as the numbers are, they are a far cry from the loss of 600,000 plus suffered earlier this year. The unemployment rate also improved to 9.6%.
Also pressing on bond and note prices, President Obama claimed in a speech earlier today that the worst may be over. It didn't seem to add to the day's losses in Treasuries but it did fend off any chances of a recovery. Nonetheless, while the bond market was a bit reluctant to take the President at his word, equities had faith in the idea.
Next week will be data intensive. We will hear the most recent inflation figures, trade balance, retail sales and consumer sentiment.
Yesterday we mentioned the idea of an early morning sell-off on the announcement followed by a recovery. However, trade became heavy on the numbers and never recovered. On the other hand, the equity rally remained firm and remains highly directional. This may point toward some follow through of Friday's move into early next week. Therefore, although our objectives of just under 115 in the note, under 114 in the 5-year and the mid-114's in the 30-year bond (almost), it seems as though there may be a little room for the market to move on the downside. We would like to wait until Monday to see how things play out but in the meantime the next support lies at 113'20 in the long bond and 113'14 in the note.
Have a great weekend!
* Due to time constraints and our fiduciary duty to put clients first, the charts provided in this newsletter may not reflect the current session data. However, market analysis and commentary does. Charts provided by Track 'n Trade, Gecko software.
**Seasonality is already be factored into current prices, any references to such does not indicate future market action.
Treasury Bond and Note Option Trading Recommendations
**There is unlimited risk in naked option selling.
Flat
Treasury Bond and Note Futures Trading Recommendations
**There is unlimited risk in trading futures.
Flat
Eurodollar Futures Trading Recommendations
**There is unlimited risk in trading futures.
June 29 - Our clients were recommended to sell September Eurodollar futures while buying a 9937.5 call as insurance. The calls were getting filled near 7 ticks, and the futures near 9933. This makes the total risk on the trade at expiration $287.50 before commissions and fees.
