Fed’s Words Comfort Bonds
Comments from one of the Federal Reserve’s FOMC voting
members, Cathy Minehan of Boston, that the economy will not skid into
recession this year is taking the steam out of T-bonds
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The March contract has accelerated to the down side and is now down 28/32 at 104
13/32. The
10-year notes
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The downside action today reduces the chance that the Fed
will cut interest rates by 50 basis points at its January FOMC meeting. The
February federal funds futures
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chance of a 50 basis-point cut, but the current price of the FFG1, 94.39,
implies the market is pricing in just a 78% chance of a 50-point cut. Former Fed
Vice Chairwoman Rivlin made similar comments earlier this week, implying that
the recession will not occur because of a strong underlying economy.Â
The American Petroleum Institute’s weekly stockpile report showed that crude oil
and product inventories dropped by a greater-than-forecast amount. The report is
bullish for the energy sector:
February crude oil
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3%.Â
Unleaded gasoline
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List, is up .0146 at .8440 and trading on its high of the session.
Heating oil
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trading at the trigger of a Turtle Soup Plus One Buy setup that it registered
yesterday.