Bonds Still On A Roll Post-Fed
T-bonds
(
USZ1 |
Quote |
Chart |
News |
PowerRating) continue to impress.
They have been on the Momentum-5
List for 10 days and have made good on — or kept you from entering the
market — Off The Blocks
entries in seven out of the past eight sessions. Bonds are responding to
the Fed’s 10th interest rate cut yesterday, which slashed the federal funds
target rate by half a percent to 2.00%, a 40-year low. Long bonds are also
in rally mode due to the announcement last week that the Department of
Treasury would stop issuing the 30-year securities.
The December
(
FFZ1 |
Quote |
Chart |
News |
PowerRating) funds futures
contract is now pricing in about a 50-50 chance of an additional .25% rate
cut to 1.75% by Christmas. That there are few signs of inflation — in fact, signs of
deflation, particularly on the wages front — makes it possible for the Fed
to continue cutting rates to stimulate the economy and for bond traders to
bid up the price of the long bond, the most inflation-sensitive debt
futures.
January 2002 soybeans
(
SF2 |
Quote |
Chart |
News |
PowerRating) are
following soybean oil
(
BOZ1 |
Quote |
Chart |
News |
PowerRating) for a second day. Yesterday,
beans traveled to the bottom of a consolidation range/handle of a low-level
cup and handle. Bean oil became the focus yesterday as a proxy for bean
demand from China. In overnight trading, traders watched the Malaysian palm
oil futures market, a substitute for bean oil, and are following it as a
proxy today. Today’s action in bean oil, up on higher prices in
Malaysia, is again spilling over into soybeans. So far the action is
strong and suggests beans will continue trading into the overhead gap.
December cocoa
(
CCZ1 |
Quote |
Chart |
News |
PowerRating) is up in an expansion bar after holding
support and not closing a gap in the 973 area last week, a constructive
development.
December lean hogs
(
LHZ1 |
Quote |
Chart |
News |
PowerRating) continue to give it back today after
a near limit-down move yesterday. The 50.500 level held as initial support before the
contract broke down out of an intraday descending triangle below this area.