Archive - Nov 5, 2009 - Story

We would like to highlight in US treasuries the 10Y future support at 117. This is the neckline of a H&S pattern within the right should of a bigger picture H&S pattern with neckline and crucial long term support at 113-15. We very much expect to test 117 over the next few sessions, and the daily chart shows how the 200-dma has been resistance and envelop on the upside recently and is guiding us lower after the recent retest. It is worth noting that the relatively dovish statement by the Fed yesterday in light of some expectations by a few market participants of a more hawkish stance led to some steepening and selling in the long end. Overall ever since the Fed has announced the quantitative easing measures we have seen on many occasions the market eact negatively to it in the long end. Part of it used to be dealers and fast money accounts buying ahead of the Fed and selling back on the follow only to buy back lower later. But some of it stems rom the short-USD carry trade which has also led to some selling in the long end. Today was a perfect example, and we feel more selling is highly possible over the next few sessions especially if risky assets behave positively. A hold of 117 is crucial, as a failure to do so would lead to a 45bps move higher in yields most likely.

CNBC reports. Unclear at this point if the arrests are related to Galleon. Identities so far unknown. Should make the paranoia in the rest of the hedge fund world reach 5mg Geodon prescription levels. Details from the WSJ: "The New York office of the FBI said the individuals were primarily taken into custody in New York. One person was arrested in New Jersey and one person was arrested in Connecticut."

• Asian stocks fall as South Korea fuels growth concern.
• China shares rise for 5th day to 12-week high, extending gains on recovery hopes.
• Congress giving homebuyers a $6,500 tax break.
• Fed signals return to growth alone doesn't warrant interest-rate increase.
• Oil prices slipped below $80 a barrel Thursday in Asia as the U.S. dollar strengthened.
• US, EU ask WTO to probe Chinese export curbs on 'critical' raw materials.