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2 Year Note Futures

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Free in-depth analysis of the 2 Year Note futures market written by a professional 2 Year Note trader.

January 27, 2013

Two Year Note Futures Broker, Van Commodities, Inc.

The two year note, basis the nearest weekly future, has traded in a two and a half handle trading range since December 2008, roughly 108.00-110.13. With expectations for an unchanged Federal Reserve fed fund policy, yields on two year cash treasuries should continue to trade in a range of 20-80 basis points. Although there will probably be no major change in the multi year trading range for the two year treasury note, basis the weekly nearest future over the near term, traders of the two year note future (ZTH13) will have to contend with several factors this coming week.


The issues of interest for market participants include; several first tier economic data points, the Federal Reserve Federal Open Market Committee Meeting (FOMC), and US Treasury auctions of two, five, and seven year notes on January 28, 29, and 30 respectively.


The economic statistics start Monday with Durable Goods Orders and the Dallas Fed Manufacturing Index, followed by Consumer Confidence on Tuesday. The two day FOMC meeting begins Tuesday with the meeting announcements on Wednesday, which will also see the release Q4 GDP and the ADP Employment report. Thursday’s data includes Weekly Jobless Claims, the Employment Cost Index, and Chicago’s Purchasing Managers’ Index. Friday’s data will start with the always important Non farm Payrolls and Unemployment statistics along with the Institute of Supply Managers Index (ISM), Construction Spending and Motor Vehicle Sales.


Prior to ZTH13 three tick sell off on Friday, the contract had become somewhat overbought based on a couple of momentum studies. The contract has been displaying potential topping action for the last several weeks. Resistance should come in at 110.06 with an initial downside target of 110.01.


2-Year Treasury Note Trader, June 3, 2012 

Although the data over the past few weeks has shown a slowing global economic environment and the Eurozone continues to struggle with its economic and political crisis, the Two Year Future basis September (ZTU12) has continued to trade in a defined range. With Two Year U.S. Treasuries trading around the Federal Reserve Funds Rate the outlook for ZTU12 is for continued range trading.

ZTU12 is overbought based on a couple of momentum studies on a daily basis. The contract should have significant resistance 110.10- 110.128. Initial support for the contract should appear around 110.00 and firmer support 109.07-109.16 over the near to intermediate time frame. A break below 108.26 would lead to a reappraisal or the contract.

February 6, 2012

Commodities Broker, Van Commodities, Inc.

Although there are no top tier economic numbers out of the US this week the items the US Bond futures market will look to are; Tuesday February 07, Consumer Credit expected at $7bn, Unemployment Claims on Thursday expected to be 370K- not much changed from the previous week and on Friday Consumer Sentiment numbers from the University of Michigan, expected to come in at 74.3 and International Trade numbers expected to register -47.8bn.

The other events which the Treasury market will pay attention to are; Chairman Bernanke’s testimony to the Senate Budget Committee February 07 and the Treasury Auctions February 07, 2012- February 09, which include Tuesday’s 3 year note auction, Wednesday’s ten year note auction and Thursday’s thirty year bond auction. Several other Federal Reserve members will speak at events throughout the week, which also includes Mr. Bernanke at his second at bat for the week February 10, when he addresses the housing market in front of the National Association of Homebuilders.

The two-year treasury note futures was trading at contract highs at the start of last week, January 30, with momentum studies providing overbought indications, the market came off its highs throughout the week and the profile of the market shows a wedge formation.