Morning Interest Rate and Treasuries Report

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February 27th, 2012

Treasuries are starting out the trading week with moderate gains, and may be finding support from concern that higher oil prices might slow the global economy. Many traders feel that macro economic sentiment has shifted from the generally positive outlook seen at the start of last week to a somewhat les optimistic standing. There also appears to be concern as well that the Euro zone situation may hold back the global economy as well, especially as other troubled EU countries are rumored to potentially renegotiate their terms with the European power block. Some traders are already looking ahead to upcoming dialogue from Federal Reserve officials later this week for signs that the Fed might become less aggressive with its easing efforts. In fact, a US economist survey has also come out with a mostly positive economic outlook for 2012 and yet that forecast seems to have been mostly ignored by the early US Treasury price action. Other traders feel that the markets are already looking ahead towards the prospect of a weaker US Durable Goods report on Tuesday morning, as that report is widely seen as a key indicator for the US economy. There is building anticipation for Fed Chairman Bernanke’s testimony to Congress on Wednesday and Thursday, as his tone on the need for ongoing support for the US economy will be a key factor for a host of financial markets later this week. Weaker oil prices this morning may have helped to temper some of macro economic slowing concerns in the marketplace.

*Disclaimer: The information in the Market Commentaries was obtained from sources believed to be reliable, but we do not guarantee its accuracy. Neither the information nor any opinion expressed therein constitutes a solicitation of the purchase or sale of any futures or options contracts.

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