Gold bugs
Oct 21, 2024
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–Rate futures were little changed last week. 2s, 5s, 10s and 30s were within 1.5 bps of the previous Friday’s close (at futures settlement time). On Friday, the 10y yield was -2.2 at 4.073 and the 30y was 4.38, down 1.3 bps. However, this morning, after having settled 120-08 on Friday, USZ is testing last week’s low, printing 119-18 as of this note. The previous week’s low was set Monday on the Columbus Day treasury holiday, at 119-14. Friday’s low was also 119-18. The high print of the week was 121-23. The re-test of lows suggests that level will be broken.
–While rates have been quiet, precious metals are off to the races with GCZ4 up 20 to a new high 2750 and SIZ4 up another $1 to 34.23. It was back in 2011 that silver hit $50. CLZ4 was another big mover last week, falling over $6 bbl to 68.69. Small bounce this morning, +1.24 to 69.93.
–FFX4 settled 9535 on Friday, indicating an ease of 25 at the Nov 7 FOMC, which would cause a final settle of 9536.2. On Friday, SFRH5/H6 settled at a modest new low of -62, down just 0.5 on the day (9605/9667). SFRZ4/Z5 settled -99 and SFRU4/U5 settled -131.25, so curve roll suggests more pressure on H/H. As an interesting aside, SFRH5 has sold off to where SFRZ4 was on Sept 25, when Z4 settled 9606 (there had been a block seller of 118k on that day of Z4 at 06.5). On Sept 25, SFRZ5 was 9710, so the one-yr calendar was -104 as opposed to current level of H/H at -62. (9/25, Z4=9606, Z5=9710. 10/18, H5=9605, H6=9667).
–Leading Indicators this morning expected -0.1. Lorie Logan (Dallas President, hawkish) speaks 8:55 EST.
