Bernanke’s Humphrey –Hawkins appearances before Congress have come and gone, but the six week trading range in the notes and bonds endures. Monday‘s test of the range top (which was first reached on the June 1st unemployment number) generated enough selling at the 13500 handle to keep the bulls in check at historical low yields of 1.43. There had been some bold calls in the financial press looking for eventual tests of 1.25 yields by year end for the notes, but the market failed to break out; instead stocks and most commodities started to bounce. The same old factors that have fueled the bull run in treasuries—European solvency issues, the gradual cooling of the Chinese economy, and the threat of a fiscal cliff—here in the U.S. are in a sense old news, and have lost some power to motivate buyers. This morning a bit of risk on trading continued as the best housing numbers in awhile for the U.S. were released yesterday, reverberated around the globe. This has stock indexes testing resistance and notes and bonds continuing to pull back. It appears the trading range market is likely to continue for now.
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Jim Barrett
Senior Commodities Broker
Jim began his career back in January of 1976 at the Mid America Commodity Exchange, trading grains. He moved over to the Chicago Board of Trade in 1980 and started spread trading the then-new Treasury bond contract. Jim remained a local on the CBOT floor over the next 12 years, alternating between the soybean and bond pits. In the early 1990s he made the tough decision to move off the floor in order to build a brokerage business. In 1995 he joined Lind-Waldock. Many of his earliest clients remai.... Read More
