Is US Treasury Bonds Getting Ready To 

Collapse ?

Fundamentals

Treasury futures are a bit higher this morning ahead of the Greek debt swap. Renewed European debt and growth concerns have supported the market in recent sessions, as the likelihood of a disorderly dismantling of Greek debt is increasing by the day. European ministers will meet and likely decide the fate of Greek debt on March 9th. The group of ministers will be voting on an involuntary restructuring of debt unless 90% of private investors participate in the proposed write-down plan. Making matters a bit more complicated for Europe, Spain is easing its fiscal targets. This is a sign that the government there may have been lulled into a false sense of security, and it could kick-off a wave of fiscal irresponsibility by troubled economies. While the state of Europe remains a positive force for Bonds, Fed Chairman Bernanke's testimony before Congress suggests the Fed may not inject further liquidity into the economy. QE3 was almost a foregone conclusion before his testimony, and this revelation suggests the 140 support level could be vulnerable.

Technical Notes

Turning to the chart, we see the June Bond contract continuing to trade in the 140-145 range. The range is tightening, suggesting there is a chance the market may break out of its slumber. The June Bond chart remains as exciting as watching paint dry, resulting in neutral oscillators and the major moving averages centering themselves in the market's trading range.