Looking at the June 10-year note this morning, we have a high of 133-02, a low of 132-265 and currently sit at 133-00.  The note has been somewhat of a confusing trade the last ten days as many Fed speakers have stated that the economy is robust and acting strong with continued strong economic numbers.  Normally when the Fed says things like we see it as bearish, but the market has been somewhat resilient.  In addition, many have continued to express the need for the Fed to start to taper, meaning buying less treasuries as the economy is showing good strength.  One explanation of why the treasuries have acted well in the last week is the China has come out and said it’s concerned with all the volatility we have seen in many of agricultural sectors and might start to import and purchase less.  So, we will see how that plays out for the rest of the week.

Looking at tecnicals for the note, I see good resistance at 133-125 level which coincides with the 100-day moving average and support comes in at 132-21 which is the 50-day moving average.  So, any move above or below those stated levels should start a new leg.  Not much in the way of economic news today besides the five-year auction, so barring any big surprises I would expect today’s trade to be quiet and orderly.

10-Year Note Jun ’21 Daily Chart
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Greg Perlin

Senior Market Strategist
Greg is a former Chicago Board of Trade member. He was an independent floor trader, pit broker and floor broker with Cantor Fitzgerald. Some of his clients included traders from Morgan Stanley and Lehman Brothers. He also acted in the capacity of desk manager for the morning trade desk. Greg was part of the elite Lind Plus Division for 10 years before joining RJO Futures in 2011.
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