Bond Market Update

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Date:4/9/2012 12:00:00 AM
There is no data
12:02 PM
10-Year:+1 03/32..2.057..USD/JPY:81.53..EUR/USD:1.3087
Strong Gains: Treasuries ended the week with strong gains as Friday's jobs report fell well short of expectations after taders moved back into the complex over the course of the week as European debt fears reemerged. Selling of peripheral paper saw the Spanish and Italian 10-yr yields climb to 5.75% and 5.50% respectively. The long bond surged more than two points following the Friday's weak jobs report with action now having almost completly erased the losses that have occurred following the March 13 FOMC meeting. A gain of 1 05/32 ran the 10-yr note back up to 99 16/32 while dropping its yield more than 13 bps to 2.050%. The benchmark yield has now eased 35 bps off of its March 20 high near 2.40%. For the week, the 7-yr yield saw the biggest drop, falling 19 bps to 1.426%. Significant flattening took place along the yield curve as the 2-10-yr spread narrowed to 174.5 bps. There is no data on Monday.
7:02 AM
10-Year:unch..2.067..USD/JPY:81.31..EUR/USD:1.3073
Little Changed: Treasuries are unchanged this morning following Friday’s explosive rally that came on the heels of the disappointing jobs data. Maturities across the complex hold within a couple of ticks of their respective flat lines after a rather quiet overnight session saw select markets in Asia and the majority of European markets closed for the Easter holiday. The 10-yr yield is now hovering near 2.065% after Friday’s buying lowered more than 10 bps from Thursday’s 2.175%. Continued flattening of the yield curve has the 2-10-yr spread tighter at 173.5 bps. Meanwhile, precious metals are mixed with gold up $12 at $1642 and silver lower by $0.10 near $31.65. There is no data.   
7:27 AM
10-Year:-01/32..2.062..USD/JPY:81.34..EUR/USD:1.3072
Quiet: The dollar index is little changed this morning as action holds near Friday’s 79.90 close. EURUSD is -20 pips at 1.3075 as markets across Europe were closed for Easter. Traders continue to watch critical support in the 1.3000/1.3050 area. GBPUSD is -5 pips at 1.5865 after early selling saw the pair briefly touch session lows near 1.5835. Action continues to center on the pair’s 200-day moving average which has provided support since mid-March. USDCHF is +20 pips at .9185 after early buying stalled near the pair’s 100-day moving average (.9230). Meanwhile, EURCHF is +10 pips at 1.2015 as action holds just above the Swiss National Bank’s 1.2000 floor.

USDJPY is -30 pips at 81.30 with the pair hitting its lowest level since March 8. The weakness comes after Japan’s current account surplus rose to JPY0.85 trln (JPY0.14 trln previous). Today’s selling has dropped the pair below 81.50 support, and has action now looking to hold the 50-day moving average near 80.70. AUDUSD is -15 pips at 1.0290 after early selling produced a test of the 1.0250 level. The hard currency has seen some selling pressure today on the heels of the hotter than expected Chinese CPI (3.6% YoY actual v. 3.3% YoY expected, 3.2% YoY previous). USDCNY strengthened to 6.3039.



USDCAD is +15 pips at .9980 as bulls once again look to push the pair back above parity. The 1.0025 level remains significant resistance with a breakout likely paving the way for a test of 1.0100. The Bank of Canada Business Outlook Survey will be released later this morning.