Bonds are currently 23 lower at 149’19

Marc Nemenoff PRICE Futures Group

Financials: Mar. Bonds are currently 23 lower at 149’19, 10 Yr. Notes 6 lower at 122’15 and 5 Yr. Notes 2 lower at 115’08. The long Dec. 2018/short Dec. 2019 Eurodollar spread has widened from last weeks 21 points premium the nearby to 23 points approaching my objective of 25-26 points premium the Dec. 2018. Curiously as rates have edged higher, the yield curve continues to flatten. The spread between the 10 yr. and 30 yr. yields on the cash market has narrowed to 28 basis points premium the 30 Yr. When we started to track this spread several months ago the spread was 48 basis points. I believe this is a reflection of the Fed raising short term rates and not a sign of impending recessionary forces which in the past have resulted in yield curve flattening.

Grains: Mar. Corn is fractionally lower at 352’4, Mar. Beans 1’2 lower at 967’4 and Mar. Wheat up 2’0 at 423’4. I remain long Mar. Corn with an objective of 363’0.

Cattle: Live and Feeder Cattle closed sharply higher yesterday and 400-450 points above my Report last week (Jan. 11th). I am currently on the sidelines looking to go short Feb. LC should the market trade above 123.250.

Silver: Mar. Silver is currently 9.5 cents lower at 17.07 and about unchanged from a week ago. We remain long.

S&P's: Mar. S&P’s are 1.50 lower at 2802.25. I remain on the sidelines.

Currencies: As of this writing the Mar. Euro is 10 lower at 1.22735, the Yen 11 lower at 0.90175, The Pound 16 lower at 1.3890 and the Dollar Index 10.7 higher at 90.420. It appears that the Pound has broken out to the upside. Buy breaks of 150-200 points.

Author

Marc Nemenoff

PRICE Futures Group

Mr. Nemenoff is a 37-year veteran of the futures industry.

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