US TSYS: Announced Opening Of Narrow Strait Brings Broad Gains

• Treasuries briefly pared losses after the FOMC held rate steady on a near unanimous vote (11-1), Miran dissenting - but extended lows as Chair Powell discussed economic projections in light of effect of higher oil prices.
• Powell pours cold water on the possibility of a revision to the Fed's Communications policies, including the Dot Plot, which was being mulled last year: "we looked carefully at many aspects of the SEP and of our communications, and there just weren't, there weren't any ideas that had very broad support on the committee."
• Treasuries lower to start the day after higher than expected PPI inflation metrics (coupled with reports several Iranian gas fields were attacked) - Iran’s semi-official Fars news agency notes that Iran will hit enemy sites there were previously thought to be safe, highlighting energy infrastructure as a target in reaction to the Israeli attack on the South Pars gas field. This provides further demand for oil and gas, support for the USD and pressure for bonds and equities.
• Currently, TYM6 -17.5 at 111-14.5 (session low), the next key support at 111-06+, the Jan 20 low. Clearance of this level would highlight an important medium-term bearish development. Curves bear flattening: 2s10s -3.268 at 48.590, 5s30s -4.416 at 100.486.
• Projected rate cut pricing much cooler vs. late Tuesday lvls (*): Apr'26 -.5bp (-1.1bp), Jun'26 at -2bp (-5.6bp), Jul'26 at -5.5bp (-10.6bp), Sep'26 at -9.3bp (-16.7bp), Oct'26 -11.5bp (-20.1bp). The first 25bp rate cut back out to July 2027.
• Look ahead to Thursday: Weekly Claims, New Home Sales, 10Y TIPS R/O

• MNI: US TSY TICS NET FLOWS IN JAN -$25.0B
• US TSY TICS NET L-T FLOWS IN JAN +$15.5B

• RES 4: 186.87 High Jan 23 and a key M/T resistance  
• RES 3: 186.36 High Feb 9
• RES 2: 185.05 76.4% retracement of the Feb 9 - 12 bear leg
• RES 1: 184.08/77 High Mar 11 and a S/T bull trigger / High Feb 25 
• PRICE: 183.68 @ 16:20 GMT Mar 18
• SUP 1: 181.87 Low Mar 16
• SUP 2: 180.81 Low Feb 12 
• SUP 3: 180.10 Low Dec 5 ‘25
• SUP 4: 179.30 23.6% of the Feb 28 ‘25 - Jan 23 bull cycle 

EURJPY has breached a key support around 183.42, marking the base of a bull channel drawn from the Feb 28 ‘25 low. The break signals a stronger reversal and a continuation lower would open the next key support at 181.81, the Feb 12 low. Clearance of this level would strengthen the bear cycle. Initial firm resistance to monitor is 184.08, the Mar 11 high. A move above this hurdle would instead signal a S/T reversal and a false channel breakout.