CANADA: Analysts See Mean Reversion In December LFS (2/3)

• Treasuries remain under moderate pressure late Monday, near the mid-range for the day by the bell: Mar'26 10Y contract trades -8 at 112-08.5, 10Y yield +.0351 at 4.1702%.
• Treasury had extended lows at midmorning (TYH6 112-02.5 September 25 lows), more flow driven on heavier volumes, rather than headline at least in the first half.
• Treasuries rebound off lows after NY Fed Consumer Sentiment Survey recedes to 3.20% from November's 3.24%. A strong Tsy 3Y auction, drawing 3.614% high yield vs. 3.622% WI, contributed to the bounce off session lows.
• The main focus is on Wednesday's FOMC decision, widely expected to deliver a third consecutive 25bp cut after NY Fed Williams’ uncharacteristic guidance following the delayed September payrolls report. Potentially contentious meeting with many FOMC members preferring to have paused.
• The dot plot distribution will be watched keenly whilst we expect the economic projections to show an upward revision for GDP growth and downward revision for core PCE inflation.
• The FOMC will also see two months of JOLTS data on the first day of their two-day meeting otherwise must wait until the following week for NFP (Dec 16) and CPI (Dec 18) reports for November.
• Tuesday Data Calendar: ADP Weekly, Redbook and JOLTS for Sep/Oct; Treasury auctions include $39B 10Y note reopen.

• RES 4: 184.34 2.236 proj of the Jul 31 - Sep 29 - Oct 2 price swing
• RES 3: 183.90 Bull channel top drawn from the Feb 28 low
• RES 2: 183.07 2.000 proj of the Jul 31 - Sep 29 - Oct 2 price swing 
• RES 1: 182.01 High Nov 20 and the bull trigger
• PRICE: 181.27 @ 16:44 GMT Dec 8
• SUP 1: 180.17 20-day EMA
• SUP 2: 178.98/178.18 Low Nov 14 / 50-day EMA 
• SUP 3: 177.15 Low Nov 10
• SUP 4: 175.87 Bull channel support drawn from the Feb 28 low

EURJPY is in consolidation mode and the latest pause in the trend appears to be a flag formation - a trend continuation signal that reinforces the bull theme. Moving average studies are in a bull-mode position, highlighting a dominant uptrend. A continuation of the trend would signal scope for a climb towards 184.00, the top of a bull channel drawn from the Feb 28 low. First key support lies at 180.17, the 20-day EMA.

• -1,500 WNH6 118-08, sell through 118-09 post time at 1432:26ET, DV01 $272,500.
• The 30Y Ultra contract trades 118-08 last (-13)