US TSYS: A Lighter Overnight After Prior Ceasefire Fluctuations

Treasuries trade in narrow ranges on light volumes as they consolidate yesterday’s paring of the initially rally seen on the two-week US-Iran ceasefire. TYM6 briefly tested initial support late yesterday although currently sits a little higher. Today sees some notable data updates at 0830ET – to the extent that data can have an impact amidst a still fluid geopolitical backdrop – before 30Y supply offers a test of duration demand. 

• Cash yields are 0.2bp higher (2s) to 0.7bp lower (5s) on the day.
• TYM6 trades at 111-09 (+01+) on light cumulative volumes of 250k.
• It’s off yesterday’s late low of 111-04 in a move that briefly probed support at 111-04+ (20-day EMA) after which lies 110-16 (Apr 2 low).
• Yesterday’s high of 111-21 probed latest resistance at the notable 50-day EMA and didn’t push higher, with gains deemed corrective.
• Data: PCE Feb (0830ET), Weekly jobless claims (0830ET), GDP Q4T (0830ET), Wholesale inventories/trade sales Feb/Feb F (1000ET)
• Coupon issuance: US Tsy $22B 30Y bond re-open - 912810UR7 (1300ET). Last month’s re-open stopped through by 0.7bps but the bid-to-cover fell from 2.66 to 2.45.
• Bill issuance: US Tsy $80B 4W bills, $75B 8W bills (1130ET)
• Politics: A “closed press”-heavy schedule today, with Trump in an intelligence briefing (1100ET), four policy meetings (1330ET, 1400ET, 1700ET and 1800ET) plus a MAHA roundtable (1600ET)
• Bloomberg reports that US President Trump vowed to keep US troops in the Persian Gulf ahead of talks with Iran that are planned to firm up a fragile truce, while Tehran warned there may be mines in a strategic waterway Washington wants reopened. Iran's deputy foreign minister Khatibzadeh meanwhile told the BBC that Israeli attacks on Lebanon were a ‘grave violation’ of the US-Iran ceasefire deal.