US TSYS: ADP Payrolls Growth Stabilized, Tsy Contemplates Coupon Size Inc
- Tsys initially retreated after larger than expected ADP jobs gain - then extended lows after in-line refunding annc - while coupon sizes expected to remain stable for "at least the next several quarters" - Tsy contemplating coupon size increase and no discussion of ramping up bills in lieu adding to bear curve steepening.
- Tsys tracked German Bunds lower with no obvious headline of Block driver, unlikely that comment from Fed Miran adding to the decline: "DATA SUGGEST RATES CAN BE A LITTLE LOWER THAN THEY ARE" while "KEEPING POLICY THAT RESTRICTIVE RUNS UNNECESSARY RISKS," Bbg.
- Currently, the Dec'25 10Y contract trades -15 at 112-10 vs. 112-09.5 low, nearing the reversal trigger at 112-06. The weakness was triggered by the clean break below the 50-day EMA, currently at 112-26+, and highlights potential for a deeper retracement near-term. 10Y yield +.0720 at 4.1571%. Curves bear steepen: 2s10s +1.637 at 52.366, 5s30s +.412 at 97.121.
- Conservative Supreme Court justices Amy Coney Barrett, Neil Gorsuch, and Chief Justice John Roberts all appeared sceptical of President Donald Trump’s reciprocal tariffs, during questions to Trump’s lawyer during today’s hearing. The implied probability of Trump winning the case has dropped to 20%, per Polymarket.
- Due to the ongoing, weekly Jobless Claims, Non-Farm Productivity / Unit Labor Costs and Wholesale Inventories / Sales has been suspended. That leaves: Challenger Job Cuts (0730ET), Revelio Public Labor Statistics and Chicago Fed Labor Market Indicator (both 0830ET).
- Myriad Fed speakers on tap tomorrow: NY Fed Williams lecture at Goethe Univ. Frankfurt (1100ET), Fed Gov Barr moderated discussion community development (1100ET), Cleveland Fed Hammack Economic Club of NY (1200ET), Fed Gov Waller CB & Payments panel (1530ET), Philly Fed Paulson Consumer Finance Inst (1630ET), StL Fed Musalem fireside chat on policy (1730ET).
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USDCAD TECHS: Trend Needle Points North
- RES 4: 1.4111 High Apr 10
- RES 3: 1.4061 3.0% Upper Bollinger Band
- RES 2: 1.4019 38.2% retracement of the Feb 3 - Jun 16 bear leg
- RES 1: 1.3987 200-dma
- PRICE: 1.3947 @ 16:32 BST Oct 6
- SUP 1: 1.3897/3830 Low Sep 30 / 50-day EMA
- SUP 2: 1.3727 Low Aug 29 and a bear trigger
- SUP 3: 1.3689 Low Jul 28
- SUP 4: 1.3637 Low Jul 25
A bull cycle in USDCAD remains intact and last week’s break above the late September’s high, firms the bullish theme. This move higher also maintains the bullish price sequence of higher highs and higher lows. Note too that moving average studies are in a bull-mode position, highlighting a dominant uptrend. Sights are on 1.4019, a Fibonacci retracement point. On the downside, first key support lies at 1.3830, the 50-day EMA.
EQUITIES: Tech Discretionary Names Lead As S&P Set For Fresh Closing High
Equities had a constructive session Tuesday, with the S&P 500 set to post another record high close. Tech (+0.8% - S&P 500 subsector) and consumer discretionary stocks (+1.0%) outperforming. Consumer stapes (-0.7%) and real estate (-1.0%) lagged.
- Overall it was a tech story again: Tesla led consumer discretionary gains (+5%) as it shared hints that it would unveil a new product Tuesday, and Advanced Micro Devices soared 24% (38% at the high) after announcing a deal to supply OpenAI.
- Futures-wise, S&P Eminis are eyeing next resistance at 6812.29 (2.382 proj of the Aug 20 - 28 - Sep 2 price swing).
Below gives key levels of markets in afternoon NY trade:
- DJIA down 86.14 points (-0.18%) at 46669.52
- S&P E-Mini Future up 25.5 points (0.38%) at 6789
- Nasdaq up 181 points (0.8%) at 22959.5
Prior European bourses closing levels:
- EuroStoxx 50 down 22.99 points (-0.41%) at 5628.72
- FTSE 100 down 12.11 points (-0.13%) at 9479.14
- German DAX down 0.51 points (0%) at 24378.29
- French CAC 40 down 109.76 points (-1.36%) at 7971.78
OPTIONS: US Options Roundup - Oct 6 2025
Monday's US rates/bond options flow included:
- TYZ5 114/116cs, bought for 13 in 5k
- SFRX5 96.43c, sold at 1.75 in 4k.
- SFRV5 96.31/96.37^^, sold at 1.5 in 2k
- SFRX5 96.25/96.43^^, traded 4.75 in 1.5k.
- SFRZ5 96.31/96.25/96.18p fly, bought for 0.25 in 2k
- SFRZ5 96.56/96.62cs, bought for half in 11k
- SFRZ5 96.25/96.37/96.43/96.56c condor, bought for 6 in 4k.
- SFRZ5 96.50/96.625cs, bought for 1 in 5k (on Block)
- SFRU6/Z6/H7/M7 96.875^, bought for 306.5 in 300 lots
- SFRU6 97.43/97.12/96.81p ladder, traded -0.75 in 5k.
- SFRU6 96.37p, traded for 8.5 in 2.5k.
- 2QZ5 96.50/96.37ps , traded 1.5 in 2k.
