Daily Spot: Interest rates
A weekly summary of one complex, including daily updates of other developments elsewhere.
[pay]30-year Treasury Dec (USZ) Thursday morning’s open bounced back into Wednesday’s range to 134’07. The 9:45’s PMI revealed the frailty of this week’s rally by triggering a 1-3/4 point plunge to 132’09.
After consolidating around 132’28, the drop recovered to unchanged. So, what to make of the intraday dive – completed correction, warning shot across the bow? The low held 132’10 whose break would have signaled momentum reversing down. Now that it has held a test, a close under its 131’25 confirmation is all the more important.
The low’s “V” bottom tends to be retested, regardless of the eventual resolution. Thursday’s afternoon-long narrow range at unchanged suggests an intraday blip-up would serve as a rubber band to snap back down. But a close above 134’04 would signal a new upleg underway instead.
Gold Dec (GCZ) The inverse reaction to the Dollar was on full-view Thursday when each fluctuated widely. A close under 1300.50 was avoided, and so was a signal that momentum has yet reversed down.
Crude Oil Nov (CLX) The patience was rewarded in allowing more time for rallying off of 75.65 and through 77.00. Wednesday’s close back above 77.00 gapped up and extended to 80.00 at Thursday’s close. Now 81.35 is targeted so long as Friday’s open doesn’t gap down back under Wednesday’s 78.00 high.
Natural Gas Nov (NGX) A close above 4.00 Thursday in reaction EIA data would have been able to extend up sharply. The reaction instead spiked down to new lows. But the reaction was retraced enough to end the day testing Monday’s low, so sellers did not gain traction despite expending much energy. A close above 3.95-4.00 would still be likely to trend up sharply.
Dollar Basket Dec (DXZ) The pattern’s timing reacted almost perfectly by both probing and rejecting a new trend low, then closing above Wednesday’s low. A close above Wednesday’s high would have been optimal, but accelerating the recovery into the weekend would suffice. A close above 79.94 at any time would signal a new upleg underway targeting 82.00.
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Daily Spot coverage schedule is: Currencies (Mon), Metals (Tue), Energies (Wed), Rates (Thu), Softs (Fri, coming).