Reports Rattle Bond Market
T-bond futures
Short-term perspective: The June T-bond contract [USM9>USM9] gave back Friday’s gain in
reaction to new
reports this morning that showed evidence of inflationary pressure. The National Association of
Purchasing
Managers (NAPM) report jumped to 52.4, higher than anticipated. This reflected the increasingly
strong economy of late, and further worried the market that an interest rate hike will occur
later this year.
The other key reports showed personal income increasing by .6 percent and personal spending
increasing by .3 percent. Like the NAPM report, these figures were higher than most economists
had predicted, and they suggested consumers are ready to spend more.
Our long position in the June contract from Thursday (Feb. 25 ) is still on; we have stops
in around the 119 level.
Long-term perspective: Nothing has really changed. The market is still in a downtrend and we
still have our longer-term short position, with stops in at the 124 level.
Currency futures
Short-term perspective: The March D-Mark [DMH9>DMH9] was down again from Friday, as the dollar
keeps rising in response to projections of higher U.S. interest rates. There’s no trade
opportunity here, though.
Long-term perspective: We are maintaining our short position in the March D-mark with stops
in around the 5900 level.
S&P 500 futures
We went long the March
futures [SPH9>SPH9] this morning on the open because we expect a bounce in the
bonds will trigger a rally in this market. We’ve placed stops at the 1215 level.
Next scheduled update: Wednesday, March 3, 1999
(Check “Today’s Schedule” every day on our home page to find out about additional updates.)