Intraday Market Thoughts

Archived IMT (2011.02.07)

by Ashraf Laidi
Feb 7, 2011 0:38

RISING US BOND YIELDS DESPITE WEAK see the CHART on Yields and EURUSD 36K RISE IN JAN US payrolls. 10-year yields jumped 11 bps to 3.62%, the highest since May 2010. The level COINCIDES with the vital technical resistance at the 200-week MA and the 76.4% retracement of the decline from the April 2010 high to the Oct 2010 low. Bond traders remain preoccupied with unfolding inflationary pressures despite Bernankes insistence to the contrary. Aside from the 2-year lows in the unemployment rate, AVERAGE HOURLY EARNINGS rose 0.4% from 0.1%, the fastest increase since Nov 2008. Such figures will likely justify the bond vigilantes inflationary worries, especially after Dallas Fed pres Fisher said on Thursda he was unlikely to vote for more quantitative easing after QE2 expires in June. Mr Fisher and his Philadelphia Fed counterpart Plosser are expected to begin dissenting with the current easing as early as in the March meeting. The EURUSD CHART SHOWS $1.4130 multi-year trendline resistance remains out of reach and selling is likely to dominate near those levels. ASHRAF WILL BE ON CNN International on Monday at 9:00-9:30 GMT


Latest IMTs