Treasury Outlook for Aug 13, 2010

Treasuries were weaker Thurs. , but only by a small handful of ticks as no damage was suffered yet yo this parabolic market. Initial claims soared to 484k on the week . A disturbing trend to an indicator already on life support, 500k weeklies look to be just around the corner. Analysts have been missing lots of numbers lately, something fishy seems afoot? Really i have no answers as i rely on same stuff as most market players. Revisions to the jobs numbers all seem to be missing on the wrong side also, payroll revision downward almost 100k last month and claims now routinely getting revised downwards ( by 3k today) . It seems sell side shops as well as the gov. all seem to be fudging numbers just like consumers did for all those years to get mortgages.

The 30 year auction missed a little but direct participation was strong. Tough for auctions to come in strong when yields sit at yearly lows right at the deadline. Interesting rumor floating around re the high indirects ? Some are bidding strong in hopes of becoming primary dealers? Thats the best idea i’ve heard in a while as there can’t be a better gig than that currently.

Flip side to this? just like house flipping( excuse the pun) when this type of activity shows up it be time to grow weary of the comforts of being long? Other than that it’s the only bearish tid-bit i can come up with.

For Today

CPI ( exp. +.1 % to +.2%, core +.1%) isn’t likely to cause a stir unless way off. More focus will be on Retail Sales ( exp. + .5% , ex food and auto +.2% to +.4%) . Also out is Univ. of Mich. Sentiment ( exp. 67 to 69). Ten year futures support at 125-04.5, 124-31, and 124-24. Resistance at 125-16.5, 125-21 and 125-30. Yield range expected 2.781% to 2.683%.