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A soft U.S. retail report is helping to support higher December 10-year Treasury Notes this morning. Traders are adjusting their positions ahead of next week’s U.S. Federal Reserve meeting when the central bank will decide how much to reduce its monthly monetary stimulus.
Because of the uncertainty created by this morning’s retail sales report and the August U.S. Non-Farm Payrolls report, investors aren’t sure how much the Fed will slash from its current $85 billion in monthly monetary stimulus. Traders are estimating the Fed may reduce stimulus by only $10 billion. This is less than earlier guesses of $20 billion.
Daily December 10-Year Treasury NotesT-Notes are rebounding this morning after testing a short-term retracement zone at 123’01 to 122’26.5. Further strength was shown when the market took out a major downtrending Gann angle at 123’08.
The first upside target today is a major 50% level at 123’16. Sustaining a move above this level could trigger a further rally into the 61.8% level at 123’25.5.
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