Looking at the March 10-year note, overnight we saw a high of 130-24 and a low of 130-043 and currently the contract is trading 130-055.  Last Friday, we saw payrolls come in much weaker than expected that pushed prices to a new high for the move at 131-16, adding to the strength was the new variant that surfaced. There is not enough data for scientists to conclude if Omicron is worse than the current Delta strain. There have been reports in the last few days that say it might be more contagious, but symptoms mirror the common cold. That has taken a lot of the steam out of the note this week and traders are now focused, or let’s say refocused, on the inflation debate and the continued bottlenecks in the economy that continue to drive goods and services to levels that the consumer has not seen in years.  There has also been Fed governors on tape stating that the fed needs to be more proactive in tapering and that inflation is still too high and is starting to put a dent in consumer spending. So, as many in the fed circle have become more hawkish and early indications say the new variant may be much less dangerous than previously feared, I wouldn’t be surprised if the high we saw last Friday will be the high for days and weeks to come. A close below the 50-day moving average at 130-06 might be exactly what the bears are looking for.

10yr Note Mar ’22 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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