Morning Interest Rate and Treasuries Report

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April 20th, 2012

The Treasury market has started off the last trading session of the week with a moderate pullback from this week’s highs. Many traders feel that macro economic slowing fears remain in place but may not be as prevalent in the wake of a tempering of Euro zone debt fears. While there were divergent results from US economic reports this week, the fact that many of those US numbers countervailed each other will leave the question of US economic momentum up in the air. The impact of Euro zone risk concerns on Treasuries this morning may be uncertain, as a favorable reading on German business sentiment may have been offset by concerns over a possible leadership change in France. Euro zone debt fears may have tempered this morning by potential for the IMF to boost their war chest by roughly $400 billion. However, there has been a push by the “BRIC” countries to have a bigger say in IMF decisions, before more capital is collected from those members. Many traders feel that the US economic outlook may have deteriorated this week, as recent US data appears to be giving off signs of softening and some economists now think that the US April jobs figures may be significantly weaker than previous reading this year. However, a lack of “top tier” US economic data this morning and signs of initial strength in US equities may be putting pressure on Treasuries this morning. At least in the early going, the flow of corporate earnings news from the US seems to have fosterer a slight improvement in equity market sentiment. Since there are ongoing meetings involving the IMF and G20, traders should be on the lookout for market-moving headlines from either of those events.

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*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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