Friday, March 13, 2015
Ten Year Treasury Advance May Be Losing Momentum
Yesterday 10 year Treasuries reached toward the higher levels of early this month just below 128-00, but failed to hold to inter-session gains and in failing, created a bearish ‘shooting star’ reversal. Early week gains on both Monday and Tuesday were strong and recaptured nearly the entire decline from last Friday’s employment report. Wednesday’s gains were smaller however and yesterday’s price action appear to indicate that the slight bullish momentum built out of marginally oversold conditions into Friday’s close may have evaporated.
Interestingly, TYM5 did hold enough of yesterday’s gains to settle above a trend line dating from early February and intersecting with a high from late February (chart). We should give more attention to this if settlement today is maintained above that trend (127-00 or better).
Otherwise, Friday’s lately have had more bearish surprises than flight to quality trade and we will look with interest to both price measures in the PPI report and the sentiment numbers in the University of Michigan sentiment figures for guidance.