Daily Spot: Interest rates
A weekly summary of one complex, including daily updates of other developments elsewhere.[pay]
30-year Treasury Jun (USM) Making its move. Thursday’s rally proved that the closes under 118’26 had been absorbed. The close above 119’26 extended back to the original rally’s 120’17 target intraday. Post-close higher highs retested last week’s 120’26 overnight high.
The past two weeks’ ranging has sporadically flashed signs that selling was sponsored by weak hands. So, Thursday’s rally doesn’t seem to be the product of a flight-to-safety amid the backdrop of a falling stock market. There is potential for extending up to 122’00, so long as pullbacks hold 119’26 as support.
Dollar Basket Mar (DXH) Doubling down on the optimism. Another gap up Thursday is a little overly-optimistic, which can be said for each of the past four sessions. Rallying further up to 78.10 would stretch the corrective bounce tightly. Dipping first to at least 76.75 or 76.50 could form a bottom capable of launching a more durable rally.
Gold Apr (GCJ) Patience can be a hindrance, too. Thursday’s gap down to new relative lows and $30 intraday drop proved the weakness of repeatedly closing under 1435.00. The drop was expected, but not before momentarily probing fresh highs. Now a probe of fresh highs may be more durable, and closing back above 1424.00 would target 1450.00. Closing under 1409.00 would target 1378.00.
Crude Oil Apr (CLJ) Slippery. Three consecutive sessions of “ineffectual pessimism” suggested that the rally would resume to its 107.25 and 111.45 targets. Extending the shallow dip only increased the rally potential. Thursday’s drop of nearly $4 intraday put that to the test. A complete recovery into late-afternoon suggested it had passed the test. And so long as 102.00 holds as support on a closing basis, the rally remains likely to resume.
Natural Gas Apr (NGJ) Untapped reserve. Another close under 3.92, despite Thursday morning’s EIA report (or because of it), again suggests that sellers may be gaining traction. A close above 4.03 would signal that buyers were gaining traction.
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Daily Spot coverage schedule is: Currencies (Mon), Metals (Tue), Energies (Wed), Rates (Thu), Weekender (Fri).