Factory Crash Switches On Burners Under Bond Futures

Economic reports Thursday heartened bond bulls, enhancing
the view that the Fed has, after all, been successful in its efforts to contain
an overheated economy and inflation. The Commerce Department said factory orders
fell by their greatest amount on record, evidence that the Fed’s six rate moves
higher have cooled manufacturing demand. September T-bonds
(
USU0 |
Quote |
Chart |
News |
PowerRating)
, powered
out of their Pullback From Highs List
signal and are up 23/32 at 100 13/32. Tuesday economic data showed a seven-year high in monthly new home sales and a near-record high in consumer confidence, spurring bonds to slip from highs.

In a separate report, retail sales rose by an expected
3.3%. The sales figure shows that there is still strong demand in the economy.
Coupled with the surprisingly low factory orders report, the economic data
Thursday paints a picture of a still-churning economy with contained inflation,
an ideal climate for a stronger dollar. 

September dollar index futures
(
DXU0 |
Quote |
Chart |
News |
PowerRating)
would be on the Momentum-5 List had
energies and grains not been so strong recently. The DXU0 still registered on
the
New 10-Day Highs List
, a new contract record and the contract is following
through Thursday morningnjup .623 to 112.70.

Going the other way and from the Implosion-5 List,
Euro FX
(
ECU0 |
Quote |
Chart |
News |
PowerRating)
are trading at new contract and all-time lows, down .00640
at .88710. The highly correlated Swiss franc
(
SFU0 |
Quote |
Chart |
News |
PowerRating)
has also been in a
tumble and is tagging a new contract low. The European Central Bank raised
continental interest rates .25 basis points. Rises in euro-rates are being seen
as a negative for economic growth.