Can 30 Year Bond Futures Hold Support?
30-year Bond Futures are currently trading in proximity to crucial support levels, with particular
emphasis on the 200-Day EMA, which has consistently served as a support level since the
beginning of the trading year.
Key Developments:
As 2024 commenced, the markets found themselves at a crossroad regarding interest rate
expectations. There were concerns about whether the bond market was preemptively factoring
in 150 basis points worth of cuts in 2024. Before the release of last week's Producer Price Index
(PPI), there was a 60-65% likelihood of an interest rate cut in March, and Fed Funds Futures
were pricing in 125 basis points worth of cuts.
The PPI for December revealed a deflationary trend, indicating a contraction in producer prices.
Initial expectations anticipated a 0.1% increase, but prices contracted by -0.1%. This report
prompted a shift in market expectations for interest rate cuts from 125 basis points to 150 basis
points, resulting in a current 73% probability of an interest rate cut in March.
Technicals:
Significant support levels will persist at the 200-Day EMA and the range of 122’15-122’30.
Additionally, we are observing an intriguing golden cross setup as the 50-day and 200-day
indicators are starting to converge. If the 50-day crosses above the 200-day, it would strengthen
the conviction for a bond rally.
Check out CME Group real-time data plans available on TradingView here: tradingview.com/cme/
Disclaimers:
CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs tradingview.com/cme/
*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
emphasis on the 200-Day EMA, which has consistently served as a support level since the
beginning of the trading year.
Key Developments:
As 2024 commenced, the markets found themselves at a crossroad regarding interest rate
expectations. There were concerns about whether the bond market was preemptively factoring
in 150 basis points worth of cuts in 2024. Before the release of last week's Producer Price Index
(PPI), there was a 60-65% likelihood of an interest rate cut in March, and Fed Funds Futures
were pricing in 125 basis points worth of cuts.
The PPI for December revealed a deflationary trend, indicating a contraction in producer prices.
Initial expectations anticipated a 0.1% increase, but prices contracted by -0.1%. This report
prompted a shift in market expectations for interest rate cuts from 125 basis points to 150 basis
points, resulting in a current 73% probability of an interest rate cut in March.
Technicals:
Significant support levels will persist at the 200-Day EMA and the range of 122’15-122’30.
Additionally, we are observing an intriguing golden cross setup as the 50-day and 200-day
indicators are starting to converge. If the 50-day crosses above the 200-day, it would strengthen
the conviction for a bond rally.
Check out CME Group real-time data plans available on TradingView here: tradingview.com/cme/
Disclaimers:
CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs tradingview.com/cme/
*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
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