The yield curve continues to flatten ahead of a 10yr and 30yr auction this week, and the Russel lags behind the S&P and Nasdaq.
Good afternoon, traders. It’s Chris Jarvis with the Blue Line Futures and it’s your daily midday market minute. We’re continuing to see strength in the longer end of the Treasury curve here today. But before we get to it, if you’re watching this video like it subscribe. If you’re on our website, there is also a link to direct you to YouTube and you can subscribe that way.
We would love for you to follow us. We would love for you to help us build our following. We’re continuing to see strength in the longer end of the Treasury curve here today, looking at the CME Fed watch tool, there’s about a 9.8 to 10% probability that the Fed is going to hike interest rates in December. So it’s pricing in that we’re really not going to see another hike.
Again, continuing off of, you know, what Fed Chair Powell kind of highlighted in his last press conference. Definitely seems like the Fed is done hiking rates here for the end of the year. So when you’re looking at the Treasury curve today, again, we’ve started to see this little, you know, flattening of the yield curve trade taking place here.
Longer duration treasuries are catching a bid. You’re seeing some strength, which means yields are lower on the front end. The front end showing a little bit more weakness. Yields are a bit higher. Looking at the two year versus the 30 year, we can see that flattening effect kind of take place. Again, we do have 40 billion of new issuance coming to the market here today, ten year notes that auction, treasury auction is going to be at 12 Central Standard Time.
Definitely something that can move the markets here. We’ve got a strong three year note auction yesterday. We see a strong ten year note auction today. Maybe that leaves a little bit of room for the 30 year, too, to see some weakness tomorrow. Maybe we see a little bit of a yield curve, steepening trade happen tomorrow with the 30 year bond auction.
So we’ll also get Fed Chair Powell speaking tomorrow. Fed FOMC member Williams will be speaking here today. So a little bit they can move the market, releasing crude oil, take it on the chin here. As of late, maybe we’re seeing, you know, market participants, traders pricing in a little bit of consumer weakness, some demand weakness. I mean, we haven’t really seen too much change on the supply side dynamics.
And now we’re below the price that the White House has said they would want to refill the speakers by January, about 80 bucks or so a barrel. So definitely some headwinds. I think, you know, looking at the crude market, you know, from the demand side of things, you know, major supports are really going to come in around 75, 50, 75, 58.
So we’re going to want to watch that level. Hopefully we can hold there, you know, see maybe a little bit of a rebound in prices. Looking at the Russell today, it’s really lagging behind the other indices. You know, the S&P, the NASDAQ flirting with unchanged. But the Russell is kind of taking it on the chin, especially with, you know, longer duration treasury yields coming off of their highs, longer duration bonds actually in positive territory.
So a little bit interesting to see there. You’re actually building out a little bit of an inverse head and shoulders. If you look at 1720, that’s a pretty significant support area to keep an eye on. For the Russell, we start to see yields continue to come lower, could see a little bit of support caught there and maybe we start to build out that inverse head and shoulders nicely and, you know, grind our way a bit higher.
We get Chinese inflation data tonight. So something to keep an eye on there, you know, influencing the macro landscape and some of these major resistance levels. Looking at the S&P 4401 to 4404, that’s still going to be a major four star resistance. Looking at the Nasdaq, it’s going to be 15 for 52 to 15 for 68. Gold is really just stuck in a rut.
Again, even despite silver being positive here today, gold is just failing to move higher. So you going to want to pay attention to that? 1919 83.8 excuse me, 1960 3.8 to 1960 5.1. That’s a pretty significant level to keep an eye on there. If you have any questions, reach out to our trade desk. We’re here for you.
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