Treasuries opened to the downside by as much as 6/32’s on the cease fire in Libya and “hopeful” comments on Japan’s radiation issues. The G-7 also surprised the market with a coordinated dollar intervention, trying to stabilize the rising Yen. Oil was also off sharply at the open. All of the above have reversed course except for stocks which have been strong since the get go. Currently, the 10 year note is off 9/32’s (yield 3.28%), mortgage backs off 2/32’s and stocks are plus 120 on the big board. Trading is very choppy yet buyers of treasuries seem to step in every time the market weakens. One word of caution is that the uptrend on our hourly bar chart (10 year note futures) has been broken. Trading below that uptrend, especially if we end that day at lower levels will signal a short term top with a high probability of consolidation coming next week. Trouble with that is no one knows what will happen over the weekend on a host of fronts. We’ll wrap this up later today with our best guess and a picture of the chart. TGIF.
Scott Eggen
SVP, Capital Markets
PrimeLending, A PlainsCapital Company
18111 Preston Road, Suite 900
Dallas, Texas 75252
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