Treasury Bond Daily Commentary for 4.27.09

The 30 Year T-Bond futures are heading higher Monday, exercising their negative correlation with U.S. equities.  However, the 30 Year futures haven’t made any noteworthy fundamental moves to the upside and the downtrend remains in clear control.  If the present pullback in the S&P futures were to turn into a large selloff we wouldn’t be surprised to see a corresponding rally in the 30 Year futures. 

Although, as we’ve witnessed since the announcement of quantitative easing, every move to the upside has failed to materialize into anything noteworthy.  The 30 Year’s downside preferential reflects the huge supply of treasuries needed to fund America’s economic stimulus and recovery measures. 

Hence, the use of quantitative easing is not solving the problem, merely tempering volatility.  On a positive note, the 30 Year futures have managed to stay above March lows, preventing a catastrophic selloff. 

Fundamentally, we find supports of 124.78, 124.36, 124.03, 123.69, and 123.33.  To the topside, we see resistances of 125.19, 125.53, 125.81, 126.20, and 126.67.  The 30 Year futures are presently trading at 124 30.0.

Treasury Bond Daily Commentary for 4.27.09

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