The yield curve continues to flatten

Marc Nemenoff PRICE Futures Group

Financials: As of this writing (6:00am) Sept. Bonds are up 1’5 at 164’14 up 4’07 for the week. The 10 Year Note is up 13 overnight at 133’31, up 1’22 for the week and the 5 Year is trading 6 higher at 124’05 up 27/32s for the week. Yields have come down dramatically as new data particularly from China indicate that economies are not growing at the pace once thought and in fact may be slowing. The yield curve continues to flatten with the 2 year yielding 0,20% down 5 basis points since my last “Report”, the 5 year is at 0.74% down 16 basis points, the 10 year yield is 1.26% down22 basis points and the 30 year at 1.88%. These levels have not been seen since last Feb. Support in Bonds is 160’00 and the market is currently in resistance.

Grains: Dec. Corn is currently 5’6 lower at 526’2 and Nov. Beans5’0 lower at 1317’2. These markets have tumbled in last 2 sessions as weather patterns now call for cooler temperatures and ample rain, discounting last week sharp rally in response to the acreage report. Dec. Corn is now near the 518’0 support level with resistance now at 562’0. Support for Nov. Beans is 1292’0 and resistance 1385’0.

Cattle: Yesterday Aug. LC closed 180 lower at 120.60 and Aug. FC 162 lower at 159.00. With nearby Corn prices still high, marketing for LC are still high forcing nearby futures prices lower. That being said support is just below the market at 120.15 and resistance at 124.10.

Silver: Sept. Silver is currently 11 cents higher at 26.24 down about 20 cents for the week. Short term trend is down, long term trend is up. Support is 24.85 and Resistance is 28.20.

S&P: Sept S&P’s are down 55.00 overnight at 4294.00 unchanged for the week. Concern for slowing global growth has pressured the indices this morning as traders have moved to safe havens such as treasuries and metals.

Currencies: The Sept. Euro is 16 higher at 1.1837, the Yen 58 higher at 0.9130, the Pound17 lower at 1.3785 and the Dollar Index 12 lower at 92.52. The Yen is in support and Dollar Index is in resistance.

Author

Marc Nemenoff

PRICE Futures Group

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

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