Morning Interest Rate and Treasuries Report

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August 6th, 2012

Some traders feel that a slight shift in sentiment has been seen in Treasury prices overnight, as last Friday’s “risk-on” vibe may have been partially reversed. In other words, the impact of the better than expected US Non Farm payroll report from last week has waned somewhat and once again the Treasury market appears to be looking at the potential for further troubles from the Euro zone. In fact, a Dutch bond auction this morning showed ongoing strong demand for low yielding “safe haven” Dutch debt. On the other hand, follow-through buying in international equity markets from Friday’s reaction to the US jobs data has fostered some positive action in early US equity market trading, and that in turn has served to temper the initial flight to quality interest for US Treasuries this morning. The US scheduled report slate is relatively thin today with an employment trends index release, which probably became considerably less important in the wake of the much better than expected US monthly payroll report from last Friday. There will also be a US Fed Chairman video conference today, but the market may not be expecting much in the way of fresh guidance from the Fed Chairman in the wake of the recent “on-hold” stance issued from the last FOMC meeting. Perhaps the most important scheduled report of this week will be the Initial Jobless Claims result on Thursday morning, as the market will be looking for signs of further improvement in the US jobs sector. As usual, the Treasury market will probably take some guidance from the mid morning European equity market closes, as US Treasuries will remain on the lookout for any signs of renewed angst toward Spanish or Italian debt.
*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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