Looking at the September 10-year note we see some consolidation after interest rates hit their low in March. We have since been trading in a range, and although the stock market continues to rally, treasuries are very much still focused on current economic decimation. Traders will need to watch if this consolidation continues ahead of the next FOMC meeting on June 10th. The fed has been diligent through this crisis and the scheduled meeting may introduce new monetary policy tools. It is of our opinion that the name of the game is still about liquidity and money supply. Those are the keys to economic decisions by Fed chair Powell.

10-year on technicals in the September contract has important support at 138’110, and this level will need to hold if we want to see continue consolidation or rangebound movement. A break of this level we could see the contract trade pretty quickly to 138’000 and lower. The market remains poised to test the higher range at 139’040 and a break of this with supporting fundaments we can see a test of 139’110 or higher.

10yr Note Sep ’20 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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