Robust Demand Supports Treasury Markets

James Hyerczyk from ForexHound.com at 10/28/09

December Treasury Bonds and Notes were able to post higher closes after robust demand at today’s treasury auction helped drive down yields.  This is a sign that investors are looking for safety.

Equity futures had a choppy, volatile day.  The NASDAQ was hit hard after Chinese internet stock Baidu fell sharply.  The spilled over to the S&P and Dow, but it was the unexpected drop in consumer confidence that did the most damage.  The announcement of a stock buyback from IBM helped stabilize the market late in the day.  The short-term picture indicates more downside pressure is likely.

The U.S. Dollar finished mixed.  The Dollar lost ground to the December British Pound, December Japanese Yen and December Canadian Dollar.  Falling demand for higher risky assets helped put pressure on the December Euro.

December Gold felt pressure throughout the day as the Dollar rallied.  Technically, this market came close to major retracement area support at $1028.80.  Holding this level is key or there may be additional weakness to $1017.00. 

December Crude Oil finished higher despite the weaker Euro.  This was a sign that geopolitical events were influencing trading conditions.  Today it was reported that Iran wants permission to sell Uranium.  This may cause instability in the markets, forcing traders to take precautions.