US: Record High For 10Y Breakeven
Apr-21 18:47
- The 10Y breakeven has surged 8.5bps today to a new record high of 3.03% (above the Mar 24 high) as today’s sell-off in nominal bonds comes with little change in real yield space.
- If there’s a silver lining for the Fed it’s that it has been led by the 5Y up more than 13bps, meaning the 5Y5Y forward breakeven dip slightly to 2.54%.
- However, separate 5Y5Y inflation swaps have firmed back towards cycle highs at 2.83% and sit 20bps above where they were when Powell first indicated the shift towards hiking expeditiously.
- The acceleration in market-based measures has yet to show up in surveys but could be particularly impactful if it does.
10Y breakeven (white), 5y5y breakeven (yellow) and 5y5y inflation swap (green)Source: Bloomberg
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OUTLOOK: Wednesday Data Roundup, Fed Speak Includes Chair Powell, New Home Sales
Mar-22 18:41
- US Data/Speaker Calendar (prior, estimate)
- Mar-23 0700 MBA Mortgage Applications (-1.2%, --)
- Mar-23 0800 Fed Chair Powell, BIS Innovation panel event, moderated Q&A
- Mar-23 1000 New Home Sales (801k, 810k)
- Mar-23 1000 New Home Sales MoM (-4.5%, +1.1%)
- Mar-23 1145 SF Fed Daly, moderated discussion Bbg equality summit
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GBPUSD TECHS: Clears 20-Day EMA
Mar-22 18:30
- RES 4: 1.3439 High Feb 25
- RES 3: 1.3353 50-day EMA
- RES 2: 1.3274 High Mar 22
- RES 1: 1.3256 1.0% 10-dma envelope
- PRICE: 1.3254 @ 16:44 GMT Mar 22
- SUP 1: 1.3088/3000 Low Mar 17 / Low Mar 15 and the bear trigger
- SUP 2: 1.2954 1.764 proj of the Jan 13 - 27 - Feb 10 price swing
- SUP 3: 1.2933/2906 Low Nov 5 2020 / 2.0% Lower Bollinger Band
- SUP 4: 1.2855 Low Nov 2 2020 and a key support
The impulsive rally in GBPUSD extended Tuesday, putting the pair through the 20-day EMA resistance at 1.3230. The pair also briefly pierced the 1.0% 10-dma envelope (at 1.3256) - an indicator that successfully contained prices through the Dec - Jan upleg from 1.32 to 1.37. This could prompt a near-term correction lower in the pair, which would initially target 1.3088 - the Mar 17 low. Moving average studies remain in a bear mode for now.
US TSY OPTIONS: BLOCK, 10Y Call Ratio
Mar-22 18:19
- +10,000 TYK 122.5/125 1x3 call spds, 24 at 1412:10ET
