The action was again in the spreads as a 110 point range in UZ was posted ahead of Tuesday’s first notice day. Futures fell precipitously on the open as global assets were under pressure with Fed Watch 2016 still the focus of many traders’ minds. With next week’s global conclave in Jackson Hole sure to dominate headlines it seems macro factors will remain at the forefront. Surprising buying was uncovered around 10am EDT as prices carried back up and above through unchanged, and from this time on the BRL seemed to be the key element in the moderate rally judging from the chart alone. It is hard to parse why precisely it took roughly 2 hours for the correlation to matter, or for the weather buyers to engage, or spreads to provide buy signals, leaving plenty of room for debate as to which of these factors, if any, were the true catalyst for the eventual positive close. With the COT coming in inline on the spec side at 24,428 one imagines the headline number will not be determinative in Monday’s direction. The report seemed to bear out the recent quiet impressions of commercials, as the long decreased by 10,533 and shorts covered 15,147.
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