What The Bond Market Expects
Treasuries pulled back Thursday as stock prices
rallied higher right at the opening bell. In addition, there were several
economic reports that appeared to show signs of a growing chance of a nearby
U.S. recovery. Cooler weather and a sharp drop in the construction of apartment
buildings pushed home-building activity down in December, but the sector
continued to show signs that it is still strong.
Another report showed that initial jobless claims
dropped unexpectedly last week, but the decline was just an adjustment rather
than an improvement in the labor market.
The news moved bond-market investors who have
been anticipating a cut in interest rates at the FOMC meeting later this month.
In late-morning trading, the benchmark 10-year Treasury lost 14/32 point, or
$4.375 per $1,000 note, to 100 25/32. The 30-year Treasury dropped 19/32 to 99
26/32, its yield up to 5.385%.
FINANCIALS
The March 30-Year T-Bond
(
USH2 |
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PowerRating)
ended down by .780 to 102.969. The March 10-Year T-Note
(
TYH2 |
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.660 to close at 106.297, and the March 5-Year T-Note
(
FVH2 |
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.470 to 106.484.
BROADER MARKET INDEX FUTURES
Good news stemming from better-than-expected
earnings reports helped push the broader index futures. The March
S&P 500 futures
(
SPH2 |
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The March Dow Jones futures
(
DJH2 |
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the March Nasdaq index
(
NDH2 |
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CURRENCIES
The currencies were mostly lower
today. The March US dollar index
(
DXH2 |
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.24. The March British pound [BPH2|BPH2] closed unchanged at 143.12.
The March Japanese yen
(
JYH2 |
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PowerRating) pulled back by .000032 to
.007574. The March Swiss franc
(
SFH2 |
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PowerRating) dropped .00130 to .60030.
The March Australian dollar
(
ADH2 |
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PowerRating) fell .00080 to .51260, and
March euros
(
ECO2H |
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PowerRating) lost .00090 to end at .87920.
PRECIOUS METALS
Metal gave back gains from
previous rallies in today’s session. Feb gold
(
GCG2 |
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to close at 284.60. March silver
(
SIH2 |
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PowerRating) fell 11.70 to 444.50.
March high grade copper
(
HGH2 |
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platinum
(
PLJ2 |
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PowerRating) was the lone winner, gaining 2.7 to close at 482.90.
GRAINS
Most of the grains fell on the
session today. March wheat
(
WH2 |
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corn
(
CH2 |
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(
OH2 |
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rallied up 2.25 to 192.25. March soybeans
(
SH2 |
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close at 451.75. March soybean meal
(
SMH2 |
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PowerRating) dropped .80 to
161.90, and March soybean oil
(
BOH2 |
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PowerRating) lost .03 to end at
15.52.
SOFTS
March cotton #2 [CTH2|CTH2] gained
.28 to 37.96. March orange juice [JOH2|JOH2] rallied to 87.90, up .35.
March coffee
(
KCH2 |
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PowerRating) dropped .40 to 48.85. March cocoa
(
CCH2 |
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PowerRating) lost
17.00 to end at 1320.00. March sugar #11
(
SBH2 |
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PowerRating) lost .38 to end at
7.84, and March lumber
(
LBH2 |
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PowerRating) added .40 to close up at 262.40.
MEATS
Feb live cattle
(
LCG2 |
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.05 to close at 71.075. Feb live hogs
(
LHG2 |
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56.325. Feb pork bellies
(
PBG2 |
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PowerRating) ended at 75.75, up .22, and
March feeder cattle
(
FCH2 |
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PowerRating) lost .15 to end at 83.55.
ENERGIES
Crude-oil prices fell Thursday as worries about
rising inventories and weak demand provoked some profit-taking following a rally
the previous session.
At midday, crude oil for February delivery dipped
44 cents to $18.42 a barrel at the New York Mercantile Exchange. February
gasoline was down 1.5 cents to 54.35 cents a gallon. Heating oil rose 1.01 cents
to 52.20 cents a gallon, and natural gas fell 0.15 cents to $2.325 per 1,000
cubic feet.
The American Petroleum Institute and the
Department of Energy reported earlier this week that inventories were rising
even as global demand is weak because of a recession in the U.S. and Europe.
In the crude oil, unleaded gas and heating oil
contracts, we are now watching the March contracts in addition to the February.
The March contracts now have more open interest then the Feb contracts. Feb
crude oil
(
CLG2 |
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crude oil
(
CLH2 |
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PowerRating) at 18.63, down .85. Feb unleaded gas
(
HUG2 |
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PowerRating) at
53.61, down 2.24. March unleaded gas
(
HUH2 |
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PowerRating) at 54.98,
down 2.23. Feb Heating Oil
(
HOG2 |
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Chart |
News |
PowerRating) at 51.45, down 1.76. March heating
oil
(
HOH2 |
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News |
PowerRating) at 51.80, down 1.76, and Feb natural gas
(
NGG2 |
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PowerRating) was
lower by .14 to 2.254.