Which Big Buyer Was Missing From the Treasury Markets Today?
The equity markets managed to
eke out another day of gains, despite a weaker-than-expected durable goods
reading today. The market’s dismissal of
the data release can be attributed to the fact that the figure still included
war/weather-affected data from April. This is the last release to include April
data, and the market will undoubtedly be less forgiving of sub-par data going
forward.
Equities
Equities were slightly higher today, holding on
to yesterday’s gains. Stronger retail numbers and favorable comments from Costco
helped the retail sector lead the pack. The Nasdaq future contract
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was up 2.00 to close at 1174.50. The S&P 500 contract
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up by 2.50 to finish at 952.00,
and the Dow
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Fixed Income
Last week’s yield flattening trade (selling front
dated treasuries while buying back end issues) continued to unwind today amid
better equity performance and lighter foreign central bank interest–The Bank of
Japan was a big buyer of Treasuries last week after having intervened in the
currency markets to buy US dollars. The 10 year futures contract
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down -025 to close at 118-15; the 30 year
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was down -11 at 119-17; and the five year note was up 005 at 116-025
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Metals
The metals were generally lower today. July gold
was down 2.60 to close at 365.20
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silver
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as a result of the weaker than expected durable goods orders. Copper was down
.80 at 77.00
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at .6500.
Energy
The petroleum market were lower today after
Iraq’s de facto oil minister announced that his country would be exporting about
1.5 million barrels a day in the coming weeks. June crude was down .84 cents to
close at 28.51
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tight demand worries, and the future was up by .045 to
close at 6.119
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Currencies
The dollar had its biggest gain in two months
against the yen and made significant strides against the other major currencies. The USD index
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up by .77 and
finished at 93.58.