What Caused Treasuries To Pull Back Today?
The poorly received 10 year
Treasury note auction pulled Treasuries of their highs, and equities finished
lower as the market catches its breath from the last two months
Equities
The equity markets were lower today on the back
of more profit taking. The Nasdaq index futures contract
(
NDM3 |
Quote |
Chart |
News |
PowerRating) was down by
21.50 to close at 1118.00. The S&P 500 contract
(
SPM3 |
Quote |
Chart |
News |
PowerRating) was down
9.10 to finish at 920.40,
and the Dow
(
DJM3 |
Quote |
Chart |
News |
PowerRating) was down 70 to
finish at 8478.
Fixed Income
Treasuries were firm for most of the day until
the weak 10 year auction results were announced, and Treasuries pulled back from
their highs. Unlike the 3 year and 5 year auctions earlier this week, the yield
on the auctioned 10 year note came in 6 basis points than the market was pricing The 10 year
futures contract
(
TYM3 |
Quote |
Chart |
News |
PowerRating) was up 075 to close at 116-220; the 30 year
(
USM3 |
Quote |
Chart |
News |
PowerRating)
was up -13 to close at 116-09; and the five year note
(
FVM3 |
Quote |
Chart |
News |
PowerRating) finished
up 35 to close at 114-28.
Metals
Gold once reestablished its negative correlation
with the US dollar today and pushed higher on the back of the US currency’s
decline. Short covering was also responsible for the move and Gold June
(
GCM3 |
Quote |
Chart |
News |
PowerRating) was up 1.9% to close at 348.70. Silver
(
SIK3 |
Quote |
Chart |
News |
PowerRating) was up in
sympathy by .06 to finish at 4.8020. Copper was also higher today as a result
of a weaker US dollar, but due to physical demand–not investor demand. The
reason is that European buyers are now more inclined to buy this dollar
denominated base metal at lower prices. As a result, copper
(
HGK03 |
Quote |
Chart |
News |
PowerRating) higher by .60 to
close at 74.10 while aluminum
(
ALK03 |
Quote |
Chart |
News |
PowerRating) was slightly
lower by .0005 to .6490.
Energy
Crude
(
CL03M |
Quote |
Chart |
News |
PowerRating) was higher for a second day as a result of
yesterday’s inventory decline. June crude was up .75 to close at 26.98.
Natural gas futures
(
NG03M |
Quote |
Chart |
News |
PowerRating) were also higher, trading up .112 to close at
5.772.
Currencies
The dollar was lower against most major
currencies except the yen. As expected, the Bank of Japan threatened to intervene
to weaken the yen against the dollar, sending the Japanese currency down against
the dollar. The euro, on the other hand, strengthened to 4 year highs against
the dollar, after the European Central Bank left its short-term rates unchanged
at 2.50%. The USD index
(
DX03H |
Quote |
Chart |
News |
PowerRating) was down by .65 and
finished at 95.11.