Look To Manage Positions On The T-bond
| PREVIOUS POSITIONS | ||||
|---|---|---|---|---|
| Market |
Long/Short |
Enter | size=2 color=000000>Exit | size=2 color=000000>P/L (per contract) |
| Sep. 99 T- bonds | Short | 115-28 | 114-30 | $937.50 |
| Sep. 99 S&Ps | Short | 1429 | 1410 | $4750 |
| Sep. 99 Swiss franc | Short | .6590 | .6585 | $62.50 |
CURRENT POSITIONS (AS OF 7/30/99) |
|||||
|---|---|---|---|---|---|
| Market | Date | Long/Short | Enter | Stop | size=2 color=000000>Target |
| Sep. 99 T-bonds | – | Flat | – | – | – |
| Sep. 99 S&Ps | – | Flat | – | – | – |
| Sep. 99 Swiss franc | – | Flat | – | – | – |
Note: All price levels are approximate.
T-bond futures
The September futures [USU9>USU9] fell moderately today as the government reported personal income in June increased .7% and expenditures increased .3 %. The Chicago Purchasing Managers report was also released, which showed continued increases in basic materials purchases by Midwestern managers, further added to the selling an hour later.
In addition, bonds were still under pressure today from yesterday’s Employment Cost Index, which came in much higher than expected. Labor costs are closely watched because they are one of the biggest costs to the economy and thus have the most potential for inflation pressure. The Fed will no doubt consider this in its next meeting, and the bond market knows this. We covered our shorts at the close today at the 114 30/32 area.
S&P 500 futures
The September contract [SPU9>SPU9] was down again on follow-through from yesterday’s down move. The interest rate factor has taken the center stage again as everyone worries about a rate hike in August. We think that a hike is very likely. We will look to go long on Monday if we get another sell-off because the market will be temporarily oversold at that point. Stay tuned.
Currency futures
The September Swiss franc [SFU9>SFU9] and Euro [ECU9>ECU9] were little changed today after yesterday’s move to new highs for this latest up move. We see some buying coming into the market as capital begins to move out of the U.S. back to Europe in light of the recent sell-off in the bonds and the stock market here. We are still on the sidelines.
Next scheduled update: Monday, August 2, 1999
(Check “Today’s Schedule” every day on our home page to find out about additional updates.)