How High Can Bonds Go?
The potential
of a showdown with Iraq continued to ease
as Iraq is showing some signs of disarmament and cooperating with Hans Blix’s
order to destroy its Al Samoud missiles. Despite what was positive news, stock
index futures declined after a slowdown in consumer spending and manufacturing.
Bonds continued their run higher. Meanwhile, oil and gold declined.
After finishing in positive territory
for the past two sessions, stock index futures couldn’t make it to three in a
row. Early morning strength brought on by weekend news that Iraq is following
through in destroying its missiles was wiped out after both personal spending
and manufacturing came in worse than expected. Personal spending in January
declined 0.1% compared to an expected gain of 0.1%. This was the first drop in
four months. Manufacturing also slowed as the ISM factory index fell to 50.5
from 53.9 in January.
The dollar index broke under support
at 99.50 on the heels of the negative economic news. The March dollar index
(
DXH3 |
Quote |
Chart |
News |
PowerRating) fell 0.61 to 99.18. The greenback also fell to a week low against
the euro, basis the March euro
(
ECHE |
Quote |
Chart |
News |
PowerRating) the dollar fell to 1.08810 per euro.Â
Bond futures continued to make way
into new contract highs. Treasury futures relished on the worse-than-expected
personal spending and manufacturing news. The 10-year contract
(
TYM3 |
Quote |
Chart |
News |
PowerRating)
gained 6/32 to 115 18/32 and the 30-year contract
(
USM3 |
Quote |
Chart |
News |
PowerRating) gained 2/32 to 114
17/32
Crude oil fell for the third straight
session today as the possibly of war suffered another setback. Iraq cooperating
with Hans Blix’s order to destroy its illegal missiles would make it much
tougher for the US to invade. In yet another setback for the war, Turkey’s
parliament voted against letting the US use its bases to launch a northern
front. April crude
(
CLJ3 |
Quote |
Chart |
News |
PowerRating) fell 0.72 to 35.88. Support comes in at 35.45.
Gold also finished lower again. April
gold
(
GCJ3 |
Quote |
Chart |
News |
PowerRating) fell 1 to 349.30.
Vincent Mao