In what will be another quiet week on the economic calendar, Treasurys have begun trading slightly softer, but whether it turns out to be a quiet week news-wise is an entirely different story.
Friday saw all the Treasurys make solid gains even though the low 10-year and 30-year yields were made in the first hour of trading, while the low 5-year yield wasn't made until shortly after noon.
Seemingly helping the Treasurys out was the fact that oil futures were down as much as $15 a barrel, that low was made around 10:45 in the morning. The 5-year and the 10-year both finished with very positive looking weekly charts making me think that the target ranges I have been looking for could be seen early this week.
The weekly chart of 30-year yields didn't finish last week looking quite as friendly, having remained within the previous week's range, but it did close near its low yield for the week, which was just 3 bps from its initial target.
The oil market is an entirely different story, but since it does seem to be what drove the Treasurys most of last week it's a story that continues to matter, this morning it has already been up as much as $7 and is currently up about $4.
I don't have a great deal of confidence that I know what oil is about to do, not even much of an opinion, and even if I did any call right now would be tenuous at best, but that having been said I do see two technical targets worth mentioning and both are far enough away to make me wonder if my targets in treasuries would actually hold if those targets in oil were achieved, the targets being 75.20 and 71.05, while the low on Friday was 78.97 and it closed back at 84.00.
And then there's the SPX, which on Friday completed its 10th consecutive day of higher highs, duplicating something it had not done since August of 2024. It also got to within 7 points of the channel I've been monitoring on my hourly chart. If it were to make a higher high today, it would be the first time since July of 2021 that it made a higher high on 11 consecutive days, but the futures are currently down about 30 points.
Patterns like that always intrigue me since they beg to be broken and since the financial markets are all interrelated, a change of trend in one can result in change in the others but a pattern change and a trend change are two different things, the pattern of consecutive higher highs could be broken today and start right back up tomorrow.
Tomorrow morning a 5-day delayed Retail Sales report is expected to show the headline number up 1.4% and the Core number up 1.3%, and there's not much more news this week other than Thursday's claims report. So, this could be a very quiet week, but somehow I doubt that it will be.
