SubscribeDaily Futures Commentary May 29, 2009
Friday, May 29, 2009
The strong overnight rallies from yesterday’s lows may be signs that shorts are getting ready to cover their profitable positions in the June Treasury Bonds and June Treasury Notes. Although at times yesterday, yields were able to rise they did not close on their highs, indicating that selling pressure may subside now that this week’s Treasury auctions are coming to a finish. The longer term concerns remain inflation and how the Fed is going to exit from its currently disastrous strategy. Rising mortgage rates are of particular concern to the Fed at this time, but no one has the answer yet as to how the Fed is going to re-enter the government debt markets in an attempt to lower rates again.
Equity indices continued to tread water on Thursday, trading inside several ranges it had created this month. Bullish traders are concerned that rising interest rates will cause borrowing costs to increase in the future causing corporate profits to drop. Other traders are looking at possible inflation as a bullish factor as bond holders may seek better returns in the equity markets.
Technically, the longer the market stays …
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