THE DAILY BRIEFING

Monday, August 30, 2010

Anandh Subramanian
Research Desk anandh.subramanian@futuresfirst.in
+91-9008109641

10yr Tnotes Sep ’10 Today is the last trading day for the Sep10 contract
Chart 1: 10 yr Tnotes Sep ’10 (240 min)

HIGHLIGHT OF THE DAY

US: PERSONAL INCOME, PERSONAL

SPENDING, PCE CORE

Support Resistance Previous Day

125’095 125’215** O 126’105

125’03* 125’245** H 126’135

124’26** 125’29** L 125’025

124’16** 126’04 C 125’06

124’10 126’135*

Source: Bloomberg
Market Action: Treasuries sold off across the curve, with the meeting has decided in inject more liquidity while failing to
10yr yield registering their biggest increase since June2009, as a comment on intervention in currency markets.
better than expected GDP figure and positive comments from
Bernanke, though he did not comment on any additional Chart: 10yr generic cash yields
monetary policy measures, initiated a wave of profit booking as
rollover nears.

Analysis and Expectations

On the Run Cash Yields have moved strongly higher to test our
exhaustion targets at 2.65% and have corrected slightly from
here. A further break higher could lead us to 2.76% and the
crucial 2.85% yield levels, as long as we hold above the 2.51%
yield levels.
On the futures front, we have corrected strongly lower. We
would now expect to hold below the broken supports in the
125’215 – 125’245 region while a break of the recent lows could
target TD exhaustion targets at 124’14 levels. A break above the Source: Bloomberg
10yr cash yields closed at 2.6447%, a gain of 17.5 bps on the day.
125’29 levels could shift us to a more neutral view, targeting the
126’04 and 126’135 levels yet again. R3 128’08
Oscillators are bearish with SSTO crossing over correcting from Moving Averages R2 126’29
overbought levels while MACD have curved down and RSI has 5- DMA 125’265 R1 126’015
edged lower. 9-DMA 125’245 Pivot 125’18
Volumes remain high and OI continues to decline due to 20-DMA 125’095 S1 124’225
rolling over of contract.
34-DMA 124’115 S2 124’07
50-DMA 123’18 S3 122’28
Market Data: Bernanke said that monetary policy measure
may not be enough at the Congress needs to provide more
Camarilla R4 R3 S3 S4
stimuli. The BOJ after convening an emergency policy
Pivots 125’295 125’18 124’26 124’14

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