Treasury Outlook for Aug 20, 2010

Treasury Outlook for Aug 20, 2010

Big misses again. Claims hit psyche level at 500k and Philly Fed came in at -7 v. + 8 expected. Many of the estimates traders , writers and bloggers get come to us via Sell Side brokers and it’s from there that a general consensus expectation is formed heading into the numbers. Feeling duped lately? S&P’s down already going into the claims number today, say what you want but this process is starting to smell bad.

Sure the economists at these firms could easily tell us all to make our own predictions, and rightfully so. But to put out false or misleading projections , especially to clients , and then profit off it is a different issue. The worst part is that the Fed seems to be doing the same thing as even revisions are now consistently coming in worse.

Other thoughts going into “No number Friday” : From Zero hedge “ The Fed will surpass Japan as the second largest holder of U.S. Treasuries by the end of September….and China by mid term elections”. Does this work buying your own debt? I am going to repurchase my own debt starting tomorrow. Every few days at around 11 a.m. i will purchase this debt in small increments in an effort to boost my own economy! I’ll keep everyone updated on how it goes.

With that the Fed’s Bullard was on the wires re future bond buying possibilities. This gimmick is losing it’s aura fast.

In the meantime Treasuries sit just below low yields for the year with Tens looking like they could bust under 2.5% in a hurry. If and when we do we’ll be talking about 2.0% as the Japan type  recession is becoming a reality.

For Today

Ten year Futures support at 125-23.5, 125-16 and 125-06.5. Resistance at 126-05 , 126-08 and 126-18. Yield range anticipated between 2.683% and 2.561%.