Next Round of Stimulus: Where are the 10 year Notes Headed? Enjoy a FREE trial to real time text alerts with live trade ideas
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2. Hot Market Report: Next Round of Stimulus: Where are the 10 year Notes Headed?
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This week’s highlighted Market is 10 yr Treasury Note Futures The US 10 year treasury note market belongs to the "interest rate family" 30 year, 5 year, 2 year notes, the "Ultra bond" and others. All traded on the CBOT exchange.
The open interest in the 10yr note market is dwarfed by few contracts, With a current OI in the front month ZNU20 at 3,452,000 today , this market dominates U.S. Treasury Futures contracts across the yield curve. When the stimulus cash dispersal again increases, we know the Fed will be buying most of the Treasury paper offered through the Thursday weekly auctions. Our U.S. Governments fiscal year end is less than 8 weeks away. Funding through the end of September for a variety of obligations is done through the issuance of new debt. This time of year with greater demand for Govt debt, the price of Ten Yr Notes ZNU20 should continue to increase. It appears this bull is waiting for congress to determine the next round of stimulus, The overnight margin is low relative to the contract size.
Here is a link to the Treasury auction Calendar
Here is a link to the Treasury Auction Results link
Continue watching the size of the weekly Treasury auctions (see this week's sizes). They'll be getting bigger. And watch the bid-to-covers on the longer dated issues. The question I ask is will the demand hold up for the longer-dated paper? This from Bloomberg yesterday “ The US Treasury expanded its plans for the issuance of longer-term debt in coming months, after depending mainly on shorter-dated bills to fund the federal government’s record spending surge to address the Covid-19 crisis. The department yesterday said it will issue a record $112bn of securities at next week’s so-called quarterly refunding of maturing Treasuries. Over the three months through October, it will ramp up issuance of nominal coupon-bearing debt by a total of $132bn compared with the previous quarter. The department plans to boost auction sizes across all nominal coupon tenors, with larger increases for the longer-dated securities maturing in seven to 30 years.”
Daily chart for your review from this morning ( August 7th, 2020).
This chart was prepared using our FREE E-Futures Int'l software, which you can demo for 28 days with real time data.
Source: Moore Research Center, Inc.
Date | Reports | Expiration & Notice Dates |
---|---|---|
08/07 Fri |
7:30 AM CDT - Ave Workweek & Hourly Earnings(Jul)
7:30 AM CDT - Nonfarm Payrolls(Jul) 7:30 AM CDT - Unemployment Rate(Jul) 9:00 AM CDT - Wholesale Inventories(Jun) 2:00 PM CDT - Consumer Credit(Jun) |
LT: Aug Canadian Dollar Options(CME)
Aug Currencies Options(CME) Aug Live Cattle Options(CME) Aug Mx Peso Options(CME) Aug US Dollar Options(ICE) Sep Cocoa Options(ICE) |
08/10 Mon |
3:00 PM CDT - Crop Progress
|
FN: Aug Live Cattle(CME)
LT: Sep Sugar-16(ICE) |
08/11 Tue |
7:30 AM CDT - Core PPI & PPI(Jul)
3:30 PM CDT - API Energy Stocks |
FN: Sep Sugar-16(ICE)
|
08/12 Wed |
6:00 AM CDT - MBA Mortgage Index
7:30 AM CDT - Core CPI & CPI(Jul) 9:30 AM CDT - EIA Petroleum Status Report 11:00 AM CDT - WADSE Report & Crop Production 2:00 PM CDT - Dairy Products Sales |
|
08/13 Thu |
7:30 AM CDT - USDA Weekly Export Sales
7:30 AM CDT - Initial Claims-Weekly 7:30 AM CDT - Export(ex-ag) & Import(ex-oil) Prices(Jul) 7:30 AM CDT - Initial Claims-Weekly 9:30 AM CDT - EIA Natural Gas Report 3:30 PM CDT - Money Supply |
|
08/14 Fri |
7:30 AM CDT - Productivity-Prel(Q2)
7:30 AM CDT - Retail Sales(Jul) 7:30 AM CDT - Retail Sales Ex-Auto(Jul) 8:15 AM CDT - Capacity Util & Industrial Prod(Jul) 9:00 AM CDT - Business Inventories(Jun) 9:00 AM CDT - Univ of Mich Consumer Sent-Prelim(Aug) |
LT: Aug Lean Hogs(CME)
Aug Soybeans,Soymeal,Soyoil(CBT) Aug Lean Hogs Options(CME) Aug Eurodollar Options(CME) Sep Coffee Options(ICE) |
08/17 Mon |
7:30 AM CDT - Empire State Manufacturing(Aug)
9:00 AM CDT - NAHB Housing Market Index(Aug) 11:00 AM CDT - NOPA Crush 2:00 PM CDT - Net Long-Term TIC Flows(Jun) 3:00 PM CDT - Crop Progress |
LT: Aug Eurodollar(CME)
Aug Mx Peso(CME) Sep Crude Lt Options(NYM) Sep Sugar-11 Options(ICE) |
08/18 Tue |
7:30 AM CDT - Building Permits & Housing Starts(Jul)
3:30 PM CDT - API Energy Stocks |
FN: Sep Cocoa(ICE)
|
08/19 Wed |
6:00 AM CDT - MBA Mortgage Index
9:30 AM CDT - EIA Petroleum Status Report 2:00 PM CDT - Dairy Products Sales 2:00 PM CDT - Milk Production |
LT: Sep Platinum Options(NYM)
Sep Palladium Options(NYM) |
08/20 Thu |
7:30 AM CDT - USDA Weekly Export Sales
7:30 AM CDT - Initial Claims-Weekly 7:30 AM CDT - Philadelphia Fed Index(Aug) 9:30 AM CDT - EIA Natural Gas Report |
LT: Sep Crude Lt(NYM)
|
FN=First Notice, OE=Option Expiration, LT=Last Trade |
* Please note that the information contained in this letter is intended for clients, prospective clients, and audiences who have a basic understanding, familiarity, and interest in the futures markets.
** The material contained in this letter is of opinion only and does not guarantee any profits. These are risky markets and only risk capital should be used. Past performances are not necessarily indicative of future results.
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