Daily Futures Commentary November 11, 2009

Wednesday, November 11, 2009

The Treasury market is closed because of Veteran’s Day so Treasury futures have very little news to guide them. The rise in the stock market is once again driving up yields, which is pressuring prices. Investors are asking for higher interest rates in order to compete with the yields being offered by the stock market.

The lack of economic reports today is shifting the focus by U.S. equity traders to the U.S. Dollar. The prospect of the Fed keeping interest rates low for a “prolonged period” of time is helping to boost stock prices overnight as investors continue to treat the Dollar as a carry currency. Because of the recent Fed FOMC decision to keep interest rates historically low, bullish equity traders have a 30-day free ride. In other words, there is nothing in the economic picture in the short-run that could derail the current rally.

The U.S. Dollar hit a 15-month low against a basket of currencies last night on the prospect the Fed will keep interest rates at low levels for a prolonged period of time. This assumption …
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