Morning Interest Rate and Treasuries Report

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August 22nd, 2012

After an initial upside extension during the overnight session, September Bonds fell back towards the recent consolidation zone as a slight tempering of optimism toward the Euro zone situation and renewed fears of global slowing are thought to be provide a small measure of support this morning. Evidence of a sharp decline in Japanese exports, particularly in exports to China, have the potential to revive fears of global slowing again. It is possible that US Treasuries may be held back from further gains by the potential for a rise in US existing home sales figures later this morning. The FOMC meeting minutes release in the early afternoon, however, might temper the market’s reaction this morning’s Existing Home Sales data.

A recent pattern of improvement in the US housing sector could mean that the existing home sales report might be given additional importance today. It is also possible that Treasuries saw some flight to quality buying from news that Greek officials were asking the EU for more time to comply with their debt and austerity measures. Some traders feel that US Treasuries may be limited on the upside today by comments from the head of the Chinese central bank, who indicated they will “need” all of their available tools to head off slowing in the world’s second largest economy.
*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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