CoT, Hedge Fund Positions As Of Midweek

Following futures positions of non-commercials are as of April 2, 2019.

10-year noteCurrently net short 224.2k, up 57.7k.

The 10-year Treasury rate (2.5 percent) rallied nine basis points this week.  Support around the intraday low of 2.36 percent eight sessions goes back eight-plus years.  In the right circumstances, the path of least resistance is 2.62 percent – a crucial level going back a decade – which was lost in the middle of March. The 50-day moving average lies right there.

That said, on several daily momentum indicators, the 10-year has reached the median.  This is where bond bulls can step up and put their foot down.  On Friday, when March’s jobs report came out, a mini-reversal indeed took place, with yields having touched 2.54 percent earlier in the session.  TLT (iShares 20+ year Treasury bond ETF) peaked seven sessions ago at $126.69, closing Friday at $124.03.  Near term, should $122.50s be tested, bond bulls likely spring into action.

30-year bondCurrently net short 19k, up 1k.

Major economic releases next week are as follows.

Revised durable goods data for February is due out Monday.  Preliminarily, orders for non-defense capital goods ex-aircraft – proxy for business capex plans – rose 2.6 percent year-over-year to a seasonally adjusted annual rate of $68.9 billion.  Last July’s $69.9 billion was the highest since March ‘12.

The NFIB small business optimism index (March) and JOLTS (February) are due out Tuesday.

Small-business job openings rose two points month-over-month in February to 37, two away from last December’s record 39.

In January, non-farm job openings increased 102,000 m/m to 7.58 million, within striking distance of last November’s record 7.63 million.

March’s CPI and FOMC minutes for the March 19-20 meeting come out Wednesday.

In the 12 months to February, core CPI rose 2.1 percent.  This was the 12th consecutive two-plus reading, but at the same time inflation has softened since last July’s 2.35 percent.

The Fed kept the fed funds rate unchanged at 225-250 basis points in the March meeting.  The last hike was last December.  The Fed has already said there would be no hikes this year.

Thursday brings the PPI for March.  February’s core wholesale prices increased 2.5 percent from a year earlier.

The University of Michigan’s consumer sentiment index for April is on tap Friday.  March sentiment jumped 4.6 points m/m to 98.4 – a five-month high.  The 101.4 reading in March last year was the highest since January 2004.

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