Rates Looking to Establish New Range

After an uncommonly slow and boring day for of trading yesterday, today we are off to the races with our market already showing signs of serious volatility as it tries to establish a new range of trading. But before we get into the nitty and the gritty we need to back up quickly and discuss the boring trading day. I'll be brief...

Yesterday despite the low action (which was actually kind of nice for a change) was a big day. The reason being, there was a 10 year treasury auction which is ur direct competitor and market indicator. In addition roll occurred, which is a post in and of itself - the jist is, May coupons rolled into June coupons, so May no longer traded and we started to trade June. Why is this significant, June was a full 12 ticks below May, which is not uncommon - futures typically trade slightly lower. Usual roll days result in gains as the note returns to levels close to closing levels of the previous months close. We didn't yesterday.

In fact yesterday was flat and horizontal, evidenced by the opening of the graph you will see below. Fortunately, today gains have returned which will bring lower rates, and it appears as though the breakout we experienced during the peak of the Greek panic may actually hold. What would this mean.... these lower rates would be here to stay at least for a short while. If this does happen, we would be setting a new range, that would lead to slightly higher peaks from time to time bringing even lower rates, albeit these lower rates will need to be caught very quickly due to bounces off the new resistances levels of the range.

Let's take a look at the graph:


Consider this with the graph below a long term 1 month graph of the same note demonstrating the upward trend leading us into new ranges.

All things considered this is good news. Let's hope the trend continues.

If you have been holding off on a refinance waiting for rates to come back down this is your opportunity we would be happy to discuss your personal options in detail without obligation. Visit our website and complete on online application or give us a call.