Four Reasons For Stronger Treasuries Today
Oil was lower on the back of
the UN Security Council vote, while equities and treasuries made their way
higher.
Equities
Equities finished higher today on little
fundamental news. Most of the gains were in the small- to medium-sized issues,
as the “Generals” lagged the broader move The Nasdaq futures contract
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up by 9.90 to finish at 932.00,
and the Dow
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Fixed Income
Treasuries had a strong session today due to a
confluence of factors, including weaker than expected weekly jobless claims;
market expectations that the Bank of Japan will continue to intervene in the
currency markets — intervention to strengthen the dollar is accompanied by
purchases of risk-free treasuries; and a report in the Washington Post
suggesting that the Federal Reserve will ease in June; and finally, the small
benefit associated with taking a short position (in today’s world) ahead of a
long weekend. As result, the 10-year futures contract
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up -115 to close at 118-255; the 30-year
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was up -24 at 121-05; and the five-year note was up 065 at 116-015
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Metals
The metals took a breather today, as a result of
profit-taking. The July gold contract was down 4.10 to close at 368.10
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silver
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at 76.80
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Energy
Crude oil prices were lower today after the UN
Security Council voted to end 13 years of sanctions against Iraq, clearing the
way for the US and UK to sell Iraq’s oil and use the revenue to rebuild the
nation. June crude fell .18 cents to
close at 28.85
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followed oil’s direction, as the near-month futures was lower by .163 to
close at 6.035
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Currencies
With the exception of the Canadian dollar, most
other major currencies posted modest gains against the US dollar today. The
Japanese currency (which is highly correlated to the Japanese banking index
TOPIX) was pushed higher today in reaction to a government bailout of the fifth
largest bank — giving the markets hope that the massive non-performing loan
portfolios might be taken off the books. The USD index
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up by .03 and
finished at 93.71.