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June 3, 2013

Treasury Techs Near Point of No Support

June 3, 2013

Treasury Techs Near Point of No Support

PMI Manufacturing Index (May 2013)

– Level 52.3. Previous was 52.1.

Translation: modest growth.

ISM Manufacturing Index  (May 2013)

– Level  49.0. Previous was 50.7.

Translation:  modest contraction.  This is the lowest reading since June 2009.

Construction Spending  (April 2013)

– Construction Spending Month/Month change 0.4%. Previous was -1.7%.

Construction on single family residential was +1.4%.

Some words about Treasury techs:

Here’s a some important Treasury technical analysis. The notion is that this establishes a baseline for rates on all fixed income securities including mortgages.  The techs are at a place where if they lose a couple of point in price there is no technical support.  If this level is broken through, prices could free fall and rates rise sharply.