Looking at the December note, we have a very narrow range today with a high of 133-20 and a low of 123-07 and are currently trading at 133-13. The market is setting to digest some key economic numbers that began today. We had ADP employment and ISM manufacturing early this morning with the reading at 374K which was a big miss as the street was looking for 613K, on the upside, the ISM came out a tad better than expected at 59.9 vs 58.6. There is no doubt the numbers we have seen in the past few weeks are due to the presence of the Delta variant. It’s too early to know for sure if this is the start of a weakening economy or just a pause of the powerful and strong numbers that we have seen since early summer. Last week, many fed governors were on tape stating they would like to see the fed start to taper, which is the fed buying bonds to keep rates artificially low. As the economy has shown overall to be very resilient many wish the fed would stop. The problem with their view is that the Fed stated that they still see risks in the economy and indicated that a taper was not imminent. So, we have dissent from many fed governors and Chairman Powell which is not allowing traders to get a firm handle on the next move in treasuries. Friday is the monthly employment report and if it comes in stronger than expected, one should anticipate a sharp rise in yields and lower prices.

10-Year Note Dec ’21 Daily Chart
800-826-2270312-373-5323Series 3 Licensed

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.
Read More