Oh, Philadelphia!
An unusually slow Philadelphia Fed’s January Business Outlook Survey has the
bonds and currencies roiling.Â
T-bond futures
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PowerRating) rallied
on an unusually weak Philadelphia Fed’s January Business Outlook Survey
which was the slowest in 32 years.
In Carolyn Boroden’s Futures
Perspectives, she identified two key clusters that could provide resistance
for this contact. The upper level was the 104 19/32 to 22/32 area. March
bonds have declined as many as nine ticks off this level, have retested this
level once and are currently trading in the bottom part of this range. The
contract also traced and descended off an intraday
reversal pattern at the 104 21/32 handle in a formation similar to the Turtle
Soup Plus One Sell daily signal, but in the 5-minute bar time frame.Â
The Fed won’t get confirmation of the local Philadelphia Fed’s January
Business Outlook Survey on a national scale until the day of its Jan. 30-31
meeting: While the Fed will, no doubt, get the early call, The National
Association of Purchasing Managers (NAPM) survey–the national equivalent to
Philly–will not be released to the public until the day after the meeting. As
Tony Crescenzi says on TradersWire’s BondWire,
a super-weak NAPM would heighten the chance that the Fed will cut rates at the
meeting 50 basis points. A 50-basis-point cut within one month would be the
first in 10 years and unprecedented under the Greenspan regime. The January
federal funds futures
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PowerRating), the most accurate barometer of likely Fed short-term
interest rate moves, is trading just off the session highs, pricing
in a 94% chance of a 50 basis point cut for the January
meeting.Â
Housing starts rose .3% last month, which should fuel the demand for copper
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PowerRating).
The March contract is up 2.75 at 85.50.
Cocoa
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PowerRating) continues to lead the Momentum-5
List, rising for a sixth consecutive day on rising volume.