Outlook:

Treasuries look set to open near unchanged this morning as participants bear upfor first quarter GDP numbers.

The US economy is expected to have grown at a 5.0% annualised rate in the firstthree months of the year. Furthermore the market is looking for inflationarypressures to rise, with the GDP price deflator expected to come in at 2.0%, upfrom 1.5%. The data, if it comes in near expectations, is expected to providefurther evidence that the US Federal Reserve will be forced to raise interestrates after its May meeting.

Meanwhile the market will also see weekly unemployment claims data this morning.Initial claims for the latest week are expected to be down 13,000 from lastweeks 353,000. Both the unemployment claims data and GDP reports are released at8:30 ET.

U.S. T-Bonds Chart Outlook:

U.S. T-Bonds remain in a bearish price phase despite recent price consolidation.Prices remain bounded by the trading range on April 23 and the market will needto break out of this range to dictate short term direction. Bears will belooking for a break below the 107-12 level, which will then take prices down to107-02. Yesterday’s weaker close should give them some confidence that they canaccomplish this break. From there targets are pegged in the 104 handle. To theupside a push above 108-17 should take prices up to the upper 109-00 handle.

10-Year Notes Chart Outlook:

Prices closed lower on Wednesday, with the market failing again at its 10-Daymoving average and reversing lower for the day. Bear’s are now in the ascendancyafter yesterday’s weak close and will look for a close below support at 110-15,to take prices down to the 108-00 handle. To the upside a close above 111-16 isstill needed if prices are to move up toward 112-00.