Friday October 15, 2010 - 19:38:42 GMT
Share This Story
Forex Hound - www.forexhound.com
Treasury Bonds Fail to Hold Critical Retracement Zone
December Treasury Bonds failed to hold two
key support clusters at 132â€™10 to 132â€™05 and 131â€™22 to 131â€™18 this morning,
triggering a sharp sell-off in the government debt market.
Although the T-Bonds began to turn south at
around the time the U.S. released two key economic reports, the CPI report was
benign and retail sales a little stronger which meant something else was
responsible for the weakness.
Some traders are blaming the lack of
clarity from Federal Reserve Chairman Bernanke for the weakness. These traders
may have been expecting Bernanke to lay out a roadmap for the Fedâ€™s
quantitative easing program.
At noon central time, the cause of the
weakness in the T-Bonds became clear. The Treasury delayed the release of the
report which was expected to name China as a currency manipulator.
Rumors were flying this morning that China
was going to threaten retaliation if the U.S. told the world that it was
manipulating the Yuan.
Based on these rumors it is possible that China showed
its power by selling Treasury Bonds. Since it is the worldâ€™s largest holder of U.S.
debt, they may have been putting T-Bonds out for sale just to prove how much
power over our Treasury debt it possesses.
Another conclusion that I have reached is
the Federal Reserve may have been behind the drop in the Treasury Bonds. Since
the Fed first hinted at another round of quantitative easing, Treasury Bonds
have rallied sharply higher. Since the new QE plan is geared toward buying Treasury
Bonds, it is in the Fedâ€™s best interest to keep the price low.
In conclusion, Bernankeâ€™s speech and the
pulling of the Treasury currency report may have been a well-orchestrated ploy
to weaken Treasury Bonds so that the Fed wouldnâ€™t have to chase them higher.
Forex Trading News
Daily Forex Market News
Forex news reports can be found on the forex research
headlines page below. Here you will find real-time forex market news reports
provided by respected contributors of currency trading information. Daily forex
market news, weekly forex research and monthly forex news features can be found
Real-time forex market news reports and features providing
other currency trading information can be accessed by clicking on any of the
headlines below. At the top of the forex blog page you will find the latest
forex trading information. Scroll down the page if you are looking for less
recent currency trading information. Scroll to the bottom of fx blog headlines
and click on the link for past reports on forex. Currency world news reports
from previous years can be found on the left sidebar under "FX Archives."