US TSYS: 30Y Test Of 5.00% Rebutted, JOLTS In Focus
- Treasuries are modestly lower across the curve, for the most part having remained within yesterday’s range although with 30s earlier extending lows as yields briefly tried to test 5.00%.
- Today sees focus on the JOLTS report but with Musalem and the Beige Book also worth watching from a Fed angle as well as potential headlines from President Trump from 1100ET onwards.
- Cash yields are 1.2-2.8bp higher on the day, with increases led by the belly and 30s lagging.
- 30Y yields earlier topped out at 4.9997% (currently 4.974%) having last exceeded 5.00% on Jul 18.
- Curves again saw fresh ytd steeps overnight before pulling back, with 5s30s hitting 124.6bps and currently at session lows of 122.5bps ahead of the US session.
- TYZ5 trades at 112-03 (-01+) on mild volumes of 270k, having coming close to yesterday’s low of 111-31 but remained within range throughout.
- Yesterday’s low probed support at 111-31+ (20-day EMA) after which lies 111-19 (50-day EMA) with the recent pullback deemed corrective. Resistance is seen at 112-20+ (Aug 28/29 high).
- Data: MBA mortgage applications (0700ET), JOLTS Jul (1000ET), Factory orders Jul (1000ET), Wards vehicle sales Aug
- Fedspeak: Musalem on economy and policy (0900ET), Beige Book (1400ET)
- Bill issuance: US Tsy $65B 17W bill auction (1130ET)
- Politics: Trump in bilateral meeting with President of the Republic of Poland (1120ET, WH press pool)
- Note that the District Court-level decision in Fed Gov Cook's lawsuit didn't materialize yesterday as the judge gave the Justice Department until Thursday to file another brief.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
US TSYS: Stabilization Before A Thin Docket Ahead After Last Week’s Swings
- Treasuries have recently pared losses to further limit moves from Friday’s close with the nonfarm payrolls report and its hugely weak two-month revisions digested. For a succinct summary of last week's swings seen after a patient Fed and weak payrolls report, see the MNI US Macro Weekly (link here).
- We touch on it more in the STIR bullet but President Trump says he will announce a new Fed Governor and BLS commissioner in the coming days following a surprise resignation/termination on Friday.
- Cash yields are 1-2bp higher on the day, with 2Y yields for instance more than 25bp before pre-payrolls levels.
- 10Y yields, currently at 4.232%, appeared to meet some support at 4.20% on Friday, touching 4.2002%. It last breached 4.20% on Jul 1 and before that late Apr/early May.
- TYU5 trades at 112-05+ (-01) having pulled back off an overnight high of 112-12, on solid cumulative volumes of 510k as non-US participants caught up with Friday’s price action.
- Friday’s rally punched through 111-14+ (Jul 22/30 high) whilst the overnight high stopped just short of resistance at a bull trigger of 112-12+ (Jul 1 high). There’s further resistance seen shortly after with 112-15 (61.8% retrace of Apr 7-11 sell-off).
- Data: Factory orders Jun (1000ET)
- Fedspeak: None scheduled
- Bill issuance: US Tsy $82B 13W, $73B 26W bill auctions (1130ET)
SOFR: Mix Of Net Long Setting & Short Cover Seen Friday
OI data points to net short cover dominating in the white pack on the SOFR futures strip on Friday, before net long setting came to the fore further out the strip.
- Futures rallied on a combination of the soft economic data, President Trump's choice to make changes at the BLS and the resignation of Fed's Kugler.
| 01-Aug-25 | 31-Jul-25 | Daily OI Change |
| Daily OI Change In Packs |
SFRM5 | 1,234,142 | 1,253,764 | -19,622 | Whites | -10,537 |
SFRU5 | 1,304,217 | 1,319,881 | -15,664 | Reds | +2,934 |
SFRZ5 | 1,356,716 | 1,316,869 | +39,847 | Greens | +43,794 |
SFRH6 | 1,068,748 | 1,083,846 | -15,098 | Blues | +20,446 |
SFRM6 | 887,941 | 886,557 | +1,384 |
|
|
SFRU6 | 845,706 | 847,985 | -2,279 |
|
|
SFRZ6 | 931,604 | 924,990 | +6,614 |
|
|
SFRH7 | 720,393 | 723,178 | -2,785 |
|
|
SFRM7 | 711,550 | 710,800 | +750 |
|
|
SFRU7 | 565,561 | 532,978 | +32,583 |
|
|
SFRZ7 | 485,714 | 476,762 | +8,952 |
|
|
SFRH8 | 331,553 | 330,044 | +1,509 |
|
|
SFRM8 | 260,560 | 250,177 | +10,383 |
|
|
SFRU8 | 205,641 | 201,107 | +4,534 |
|
|
SFRZ8 | 208,248 | 206,749 | +1,499 |
|
|
SFRH9 | 149,121 | 145,091 | +4,030 |
|
|
US TSY FUTURES: Net Long Setting Dominated On Friday
OI data points to net long setting dominating on Friday, as the soft economic data, President Trump's choice to make changes at the BLS and the resignation of Fed's Kugler factored into the rally in Tsys.
- Over $7mln of net DV01 equivalent was added across the curve, with the only interruption to the wider theme coming via modest net short cover in US futures.
| 01-Aug-25 | 31-Jul-25 | Daily OI Change | OI DV01 Equivalent Change ($) |
TU | 4,544,796 | 4,534,737 | +10,059 | +370,945 |
FV | 6,982,337 | 6,957,890 | +24,447 | +1,047,782 |
TY | 4,975,435 | 4,930,762 | +44,673 | +2,956,817 |
UXY | 2,448,676 | 2,425,449 | +23,227 | +2,038,570 |
US | 1,737,964 | 1,739,990 | -2,026 | -283,762 |
WN | 1,955,341 | 1,948,621 | +6,720 | +1,224,258 |
|
| Total | +107,100 | +7,354,610 |
