Looking to the Futures

Treasury auction results have come in strong so far this week, as 10-year yields fall from 24-year highs. The 10-year Treasury yield is considered the global benchmark for long-term borrowing costs and is often considered as the risk-free rate. 

Wednesday's 10-year auction sold $39.926 billion including $926.3 million allocated to SOMA (System Open Market Account) which is the portfolio of securities owned by the Federal Reserve. 

Of the total, indirect bidders received roughly 80% of the competitive awards, about $31.06 billion of the $38.67 billion accepted. Because this group often includes foreign central banks and institutional investors, its strong participation is generally viewed as a sign of solid demand.

The elevated bid-to-cover ratio provided another sign of strong demand. While the ratio of total bids to the amount offered typically ranges from 2.4x to 2.6x, Wednesday's auction came in higher than average at 2.77x, essentially meaning there was $2.77 of bids for every $1 of debt offered. 

This is the second of three auctions scheduled for this week. $22 billion of the 30-year bonds are set to be offered on Thursday. While strong results came from Tuesday's auction with $58 billion of the 3-year notes being sold.

Ultra 10-year Treasury Note futures rebounded from a low of 104'140 after Wednesday's solid auction results. 

Light Sweet Crude Oil futures (/CL) have traded in a wide range since June 30, moving between 67.04 and 93.50. Prices have since pulled back and are trading below the 9-day, 50-day, and 100-day simple moving averages (SMA), while remaining above the 200-day (SMA), which recently acted as support after crude briefly moved below it and reached a low of 67.04 on July 2. From a short-term trend perspective, the 9-day (SMA) crossed above the 50-day simple moving average on July 27, which may be viewed as a bullish technical development. However, the 20-day simple moving average and 21-day exponential moving average remain below the 50-day (SMA), suggesting the broader technical picture remains mixed. Volatility has eased from mid-month levels, falling from a high near 175% to roughly 69%. Momentum has also cooled, with the relative strength index declining from near 70 to 52.6. With the RSI only slightly above 50, momentum appears more neutral and may suggest crude is beginning to stabilize.

New futures products are available to trade with a futures-approved account on all thinkorswim platforms: 

• Ripple (/XRP)
• Micro Ripple (/MXP)
• 100 OZ Silver (/SIC)
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• Solana (/SOL)
• Micro Solana (/MSL)

Visit the Schwab.com Futures Markets page to explore the wide variety of futures contracts available for trading through Charles Schwab Futures and Forex LLC.