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10 Year Note Futures

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Free in-depth analysis of the 10 Year Note futures market written by a professional 10 Year Note trader.

June 06, 2013

10 Year Note Futures Trader, Van Commodities, Inc.

The Treasury note future (ZNU13) traded down Friday after the US Nonfarm Payroll data came in slightly stronger than the market consensus. Traders ignored the net downward revisions to the Nonfarm payroll data for the prior two months and a marginally higher than expected Unemployment rate.

Nervousness over the possibility that the Federal Reserve will begin tapering their bond purchases some time in the third quarter appears to have a continuing grip on the Treasury market and ZNU13. Fixed income traders will have to contend with a number of factors next week including several Treasury bond auctions throughout the week and a couple of first tier economic statistics at the back end of the week.

The US Treasury will auction three and ten year notes on Tuesday and Wednesday respectively and thirty year bonds on Thursday. Traders will also be watching for the weekly Jobless claims data and Retail Sales on Thursday, followed by Producer Prices (PPI), Industrial Production (IP) and the Reuters/ University of Michigan consumer sentiment data on Friday.

ZNU13 is oversold based on several short and intermediate term momentum indicators, but the longer term trend for ZNU13 appears to rolling over to the downside. In the near term initial resistance may come in at 130.10-131.07, with stronger resistance 132.01-133.00.  If support in the 128.16 area gives way, ZNU13 may find stronger support around 125.00-127.11.


May 28, 2013

Treasury Note Broker, Van Commodities, Inc.

The Ten Year Note future (ZNM13) continued to trade down today on the back of stronger than expected Consumer Confidence data and a rise in single family home prices. Consumer Confidence came in at a five year high of 76.2, beating expectations for a reading of 72.3. The S&P Case Schiller Index for home prices rose 10.9 percent year over year for March, the highest gain since 2006.


New supply from several Treasury Bond Auctions Tuesday through Thursday also reduced bidding for Treasury notes and bonds today and may continue to negatively affect ZNM13 over the next few days. The result for the Two Year Note, auctioned Tuesday, was weaker than expected and left dealers with the bulk of the paper.


The lower price for ZNM13 continued the trend of the past four weeks, beginning with the strong Nonfarm Payroll data on May 3. A change in investor expectations, about the possibility for the Federal Reserve to start tapering their Quantitative Easing program, arose from Ben Bernanke’s address to Congress last Wednesday and the release of the Federal Open Market Committee Meeting (FOMC) minutes from April 30.


There are several economic releases throughout this week, but the market will be looking to the Nonfarm Payroll and Unemployment data a week from Friday to gauge the possibility for a change in Federal Reserve Policy. The economic statistics to be released over the next several days may not have a long lasting affect on ZNM13 if they fall within market expectations.  On Thursday the second estimate for first quarter GDP along with pending home sales data will be released; to be followed on Friday by Personal Income and Consumption data, the Chicago Purchasing Managers Index (PMI) and the final revision of Michigan Sentiment data.


ZNM13 is oversold based on several short term momentum indicators, but over the next few days further downside may be expected. The contract, though, may be close to a tradable bounce over the next week or so. Over the near term initial resistance may come in at 130.18-130.31, with stronger resistance at 131.16-132.05. Initial support may come in at 128.11-129.07, with stronger support at 127.14-126.00, over the next week.


January 7, 2013

Treasury Note Trader, Van Commodities, Inc.

The ten year Treasury note future (ZNH13) traded down three percent over the past five weeks with investment money seeking higher risk assets going into year end. Many of the problems global investors concentrated on over the past several months were put aside resulting in less demand for the safety of the US treasury market over the past few weeks.


This week Treasury traders will be gauging demand for the US Treasury supply coming to market. The US Treasury will be auctioning three year treasury notes on January 08, ten year notes on January 09, and thirty year bonds on January 10. US economic data released this week should not have any long lasting effect on ZNH13 as most of the statistics are of a second tier nature.


ZNH13 is oversold on both a short and intermediate term basis. The contract may seek lower prices in the near term, but the downside appears to be limited over the next several weeks. Initial support may come in at 131.03-131.11.  If last weeks lows do not hold, stronger support may come in at 129.19-130.16. On a rally initial resistance may come in at 132.06-132.18 with stronger selling at 132.25-133.01.


November 11, 2012 

10-Year Treasury Note Trader, Van Commodities, Inc.

Concerns over potential gridlock in Washington, after President Obama’s reelection and the resulting uncertainty over the “Fiscal Cliff” led to a risk off week and a strong rally in the Ten Year Treasury Note future, basis the December contract ZNZ12. Anxiety over the possibility for dividend and capital gains tax hikes next year, have stock investors taking money off the table this year at potentially lower rates. This resulted in a four percent slide in the S&P 500 over the week and put a strong bid under US Treasuries.


Apprehensions over the end of the “Bush tax cuts” along with spending cuts in the Budget Control Act of 2011 have investors nervous about the potential for a recession in 2013. There is broad agreement by economists and business people that if the Government reduces spending via the budget sequestration in the Budget Control Act and an increase in taxes occurs at the beginning of 2013 the economy would suffer a significant slowdown.


ZNZ12 closed on Friday above its multi-week trading range. A couple of short term momentum studies are registering overbought, but intermediate term indicators would be supportive of further gains. Initial support comes in at 133.22-133.14 and then 133.02-132.14. Initial resistance comes in 134.16-135.00 and then 136.00-136.20. Overall target on the move is 136.30.

10-Year US Treasury Note Trader, June 3, 2012

The doom and gloom in international capital markets was pervasive on Friday; all an investor had to do was look at interest rates on Government bonds and notes in the world’s perceived safe haven, the U.S. The historically low rates at which the U.S. can borrow to fund its budget deficit have caught many market participants by surprise. The decline and level of interest rates are reflected by the uncharted price action of the U.S. Treasury Note futures traded at the Chicago Mercantile Exchange (CME).

10-year U.S. treasury note futures in the U.S. rallied powerfully on Friday resulting from news of a slowing global economic environment revealed by several economic surveys. The Markit Economics’ Purchasing Managers Indices (PMI), reported for several economically significant nations, showed a slowing in growth for some nation’s manufacturing sectors and a contraction for several others. In the U.S. slower than expected economic expansion was illustrated by less growth in the Non Farm Payrolls data; higher Unemployment levels and a slightly weaker than expected Institute for Supply Managers Index (ISM), which portrayed a slow down in the rate of growth for the U.S.’s manufacturing sector.

The Ten Year Note Futures basis September (ZNU12) is trading in uncharted territory. The contract is overbought based on several momentum indicators, across several time frames. The market may see some profit taking and a minor pullback, but the overall trend still appears to be up. An initial target where profit taking may occur is 136.00, but a longer term objective is 139.00. Initial support on a pullback may be found 133.00-133.16 and more significant support should appear at 131.20-132.16. A move below 131.00 in the short to intermediate term would result in a reappraisal of the economic and Eurozone issues and our bullish stance on treasuries.

February 6, 2012

Commodities Broker, Van Commodities, Inc.

The Treasury Bond futures market from 2 year notes to 30-year bonds traded down directly after the economic releases on February 03, but quickly gathered their composure and held up quite well considering that the NFP and Unemployment numbers showed more economic strength than most market participants had expected.

The ten-year treasury note futures came into last Friday with overbought momentum studies and provided a reversal week with a new high being scored during the week and then closing below the previous weeks close.