Treasury Futures Rally
Treasury bond futures posted their biggest rally of the year Thursday on the Chicago Board of Trade, as demand for credit instruments appeared to be strong.
Jack Barbanel, director of the futures trading division of Gruntal & Co. in New York, said indications that a European institution was a major buyer in the bond market triggered the rally.
Prices subsequently broke out of a recent trading range and unleashed heavy buying by traders who watch trends on price charts, Barbanel said.
The buying came amid a supportive backdrop of speculation that interest rates will continue to drop and that the Federal Reserve will continue to stimulate the economic recovery, Barbanel added.
Treasury bonds settled 34 ticks to 37 ticks higher with the contract for delivery in March at 73-19. A tick is 1/32nd of a percentage point and represents a price move of $31.25 on a contract with a face value of $100,000.
Gold and silver failed to respond to the rally in credit instruments.
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