T-Bond trading comment (October 3, 2007)

For now, the 112 line has held on a daily close. After testing new highs in the morning, we broke the 112 line and held there for the rest of the day, even if for the close we made a half hearted try to reach again the resistance level. All morning long we bounced on the 112 level, but never did we overpass the 112-10 level that also contained yesterday's push. ADP numbers came in as expected and at 10h00 ISM non manufacturing came in sligthly stronger. This sparked some bid in the equities and credit indices as people momentarily forgot about the ongoing liquidity/credit crisis. As expected, bonds went on to visit lower levels and there we broke the 112 line. test

We lost almost half a buck between 10h and 12h before the bids started to disappear in the equities and from there we started to climb back. But this attempt to close over the 112 line failed and afterhours we resumed our descent... On Friday, we have NFP and there is a theory going around stating that Friday's NFP will be higher. The rumour says that due to technical problems the September NFP was missing 30k and that they will be added to this month number, hence the expected stronger number.