10-year (June)
Yesterday’s close: Settled at 119’025, down 0’08
Fundamentals: Yes, the 10-year has reached 3% but don’t get too excited just yet. While there is a 7-year Note auction today, traders are looking ahead to Q1 GDP tomorrow, the FOMC next Wednesday and Nonfarm Payroll Friday and can easily begin short-covering. We call into questions recent growth as well as underlying inflation and wage growth. For this reason, we see strong long-term value at the 119’00 area technically and fundamentally. The ECB left policy unchanged as expected and ECB President Mario Draghi begins his press conference at 7:30 am CT. Also, at that time weekly Jobless Claims, Durable Goods and Trade Balance are due.
Technicals: We have maintained a slight Bullish Bias into what we have called a generational support level at 119’00-119’14; if this level holds we can see a very firm bounce. We are only slightly bullish to exude the type of caution and risk management that needs to be taken upon positioning.
Bias: Neutral/Bullish
Resistance: 119’285-120’01**, 120’09**, 120’15-120’17**, 120’24-120’28***
Support: 119’00-119’14****
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