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August 15th, 2012
With US stocks posting another new high for the move yesterday and the US PPI report coming in better than expected, many traders were not surprised to see US Treasuries under additional pressure yesterday. With a full slate of US scheduled economic data due out later this morning and some of those reports capable of improving macro economic sentiment and reducing the prospects of fresh easing, there could be a significant volatility event this morning in Treasury prices.
Some traders are particularly concerned with the Industrial Production and Capacity Utilization figures for dampening expectations for near term Fed easing action. US equities were showing some early weakness while slowing concerns toward the Euro zone and China remain in place, which other traders feel will provide Treasuries with some measure of support. There will be a Treasury International Capital flows report, which could provide additional support if foreign interest in US debt instruments remained strong during their latest reporting period.
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