CoT This Week: Noncommercial Positions And More

Following futures positions of non-commercials are as of October 15, 2019.

10-year noteCurrently net short 99.7k, down 22.9k.

Most US economic data out this week continued to point to sluggish activity.  Retail sales in September fell 0.25 percent month-over-month to a seasonally adjusted annual rate of $525.6 billion; this was the first down month in seven.  September capacity utilization dropped 2.3 percent year-over-year to 77.5 percent – sixth straight down month – with the cycle high 79.6 percent last November.  Last but not the least, housing starts dropped 9.4 percent m/m in September to 1.26 million units (SAAR), although August’s 1.39 million was the cycle high.

The 10-year Treasury yield (1.75 percent) held its own this week.  Last week, it reclaimed the 50-day moving average (1.64 percent), and has pretty much gone sideways since.  Hopefully for bond bears (price), this eventually leads to another leg higher.  Nearest resistance lies at 1.90-1.95 percent.  Reclaiming the September 13th high of 1.90 percent will set a higher high.  Rates already formed a higher low on the 8th this month – 1.51 percent versus 1.43 percent from September 3.

Near term, though, the daily is in overbought territory and could come under downward pressure.  Besides the 50-day, trend-line support from the aforementioned September low lies at 1.53 percent.

30-year bondCurrently net short 55k, down 21.7k.

Major economic releases next week are as follows:

Existing home sales (September) will be out Tuesday.  Sales in August rose 1.3 percent m/m to a seasonally adjusted annual rate of 5.49 million units.  The cycle high 5.72 million units was reached in November 2017.

Durable goods orders (September) and new home sales (September) are scheduled for Thursday.

In the 12 months to August, orders for non-defense capital goods ex-aircraft – proxy for business capex plans – dropped 0.4 percent to $69.2 billion (SAAR).  This was the second consecutive year-over-year drop after 31 positive months in a row.

August sales of new homes jumped 7.1 percent m/m to 713,000 units (SAAR) – not too far away from the cycle high 729,000 units reached in June.

Friday brings the University of Michigan’s consumer sentiment index (October, final).  Preliminarily, consumer sentiment increased 2.8 points m/m in October to 96.  Except for August’s 89.8, sentiment has been north of 90 since November 2016, four of them over 100.

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