Dealers Buy Long Bonds As Hedges Close; $74 Bil In Treasuries For Sale Next Week and Distribution In Asia Imperils New Uptrends

The gains on long-dated bonds were capped by a drop in weekly jobless claims in advance of Friday’s closely watched government payrolls data. Also, a successful sale of 10-year Greek government notes raised optimism that the debt-heavy nation had contained its fiscal problem, reducing the safe-haven allure of Treasuries.

“Some of the recent economic numbers have disappointed,” said Evan Moskovit, head of U.S. fixed income at Sun Capital Advisers. “Some folks are moving into Treasuries as a defensive measure. They are taking some chips off the table.”

Unexpectedly weak data on jobs and housing in recent days have raised doubts over the vitality of the economic recovery. Thursday’s reading on pending home sales, which hit a 10-month low, supported the view of a slow recovery that warrants a protracted period of low interest rates from the Federal Reserve, analysts said. [Read the full article]

The Hang Seng index, Hong Kong’s benchmark, fell 1.4% Thursday as volume increased from the prior session. This distribution day came just three days after Monday’s follow-through day.

Consider, too, Tokyo’s dreadful performance: Five distribution days have been logged since its Feb. 17 follow-through. That’s five days out of the 11 sessions seen since Feb. 17 that saw heavy selling. The Nikkei 225 stands 1.4% below its Feb. 17 close.

This isn’t so awful for the broader picture. After all, careful scans of the Tokyo Stock Exchange, as well as Japanese ADRs listed in the U.S., show virtually no stocks with strong fundamentals and sound chart patterns.

But Hong Kong’s weakness is more troubling. The island city and its stock exchange are the gateway to China’s staggering growth.

How bad was the damage? Let’s see how some of Hong Kong’s leaders, featured in this column in recent months, are faring. [Read the full article]

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