Morning Interest Rate and Treasuries Report

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May 3rd, 2012

Treasuries were unable to hold onto overnight gains and have traded moderate lower this morning. With global slowing views remaining in place due to negative headlines from the Euro zone today, US Treasuries may be seeing some measure of flight to quality support in the wake of rising Italian and Spanish debt yields. With a long list of physical commodities under considerable pressure this week and inflation readings in the Euro zone overnight posting slightly lower results, many traders were expecting US Treasuries to hold onto their overnight gains well into this morning’s session. Treasuries may be finding pressure from expectations of a minor decline in US Initial Jobless Claims this morning, as the market recently has seen evidence of weakness in the US job sector. Early in Thursday’s session, a private survey of US job layoffs may set the tone of the market in front of the Jobless Claims report. The market will also see an ISM Non Manufacturing survey that is generally expected to be down from the prior month’s report. After the US economic numbers are released, the Treasury market is likely to see some impact from the Fed, as two Fed members are taking part in a panel discussion that is likely to produce some news headlines around mid morning. While June bond prices are almost 1 full point below last week’s highs, some traders feel that a large portion of this week’s economic news has reinforced the outlook for economic slowing as well as increased the amount of European debt anxiety in the marketplace.
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