The question about today's number is, did anybody know it was coming? Leaks? come on, how could they have overestimated by that much...
Well someone definitely knew it was coming, evidenced by the spike up 10 seconds before the #. should have got long yesterday
It was a very small profit indeed and I liquidated because of concerns about what is going on in other markets. The dollar is reacting very negatively to signs of slower growth and has failed to stay above 85 (US Dollar Index). Oil is not going down unless the stock market dives, which in turn makes the dollar go down. Very shaky grounds for long term bonds.
YOu've been spot on about oil, still cozing drivers pain yet not breaking new ground, YET... Hurricane season just started, let the predictions begin...
The rally about two minutes before the number was Bear Stearns puking up his long Sep 104 puts in the 10yr from earlier in the week. He sold close to 13,000 between the pit and the screen about 2 minutes before the number and another 7,000 or so after. Funny, he sold the puts at 29 on the screen before the number when they were 30 bid in the pit. I guess London brokers don't care about fill price as long as they get double brokerage on the screen (whole different story, sorry). About a 30 delta, thus option locals had to get their hedge off and buy close to 5000 futures, no liquidity on the screen for that size before NFP. Obviously the guy selling out his long puts knew something.
Long end still within the 5.00% and 5.15% range in the 10yr, thus still warrants playing 10yr as a range trade. Has worked this week. If data isn't soft next week back to 5.15%.
Thanks for the background, definitely a questionable day in terms of who knew what and when... I hate this bouncing off the 5% mark, I've always believed barriers are meant to be broken, not bounced off of, it always reminds me of Red-Rover-Red-Rover...