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30Yr Treasury Bonds Lower Despite Bullish ADP Employment Report


U.S. stock index futures are mixed.

Mortgage applications increased 1.7% and applications to refinance a home loan advanced 3.0% in the week ended January 1, according to the Mortgage Bankers Association.

The December ADP employment report showed a decline of 123,000, the worst since April, when an increase of 130,000 was expected.

The 8:45 central time December PMI composite final is anticipated to be 55.7.

The 9:00 November factory orders report is estimated to show a 0.6% increase.


The U.S. dollar index fell to its lowest level since May 2018.

Longer term, the U.S. dollar is likely to trend lower due to expectations for an extended period of low interest rates and concerns over rising U.S. levels of debt.

The euro currency traded at its highest level since May 2018.

The euro is higher despite news that the euro zone services PMI was revised lower to 46.4 in December 2020, down from a preliminary estimate of 47.3 and compared with November’s six-month low of 41.7. The forecast was 47.3.

In November 2020, industrial producer prices rose by 0.4% in both the euro area and the E.U., compared with October 2020, according to estimates from Eurostat.


Futures are mixed at the front of the curve and are sharply lower at the long end of the curve.

The 30-year Treasury bond futures fell to the lowest since April 2020. Futures are lower despite news of the jobs decline in the ADP employment report, which should be viewed as a sign of weakness.

At 1:00 the Federal Open Market Committee will release the minutes from its December 16 policy meeting.

Financial futures markets are predicting there is a 95.9% probability that the Federal Open Market Committee will keep its key fed funds rate unchanged at 0 to 25 basis points at its January 27, 2021 policy meeting. Yesterday the probability was 95.2%

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Futures and options trading involve significant risk of loss and may not be suitable for everyone.  Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.  The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM.  The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared.  The information provided is designed to assist in your analysis and evaluation of the futures and options markets.  However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.

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