US TSY FUTURES: BLOCK: Large Jun'26 2Y/30Y Ultra Steepener

• +35,000 TYK6 111 puts, 8 ref 111-09, total volume over 53,600 (exp Fri)

• RES 4: 1.1996 High Jan 29
• RES 3: 1.1929 76.4% retracement of the Jan 27 - Mar 13 bear leg
• RES 2: 1.1857 High Feb 18 
• RES 1: 1.1849 High Apr 17
• PRICE: 1.1758 @ 16:11 BST Apr 21
• SUP 1: 1.1669/1590 50-day EMA / Low Apr 8 
• SUP 2: 1.1505 Low Apr 6 and a key S/T support
• SUP 3: 1.1443/11 Low Mar 30 / Low Mar 13 & 16 and the bear trigger
• SUP 4: 1.1373 1.764 proj of the Jan 27 - Feb 6 - 10 price swing

New short-term cycle highs posted Friday resulted in price breaking above key resistance at 1.1825. The 1.1849 print tilts the near-term focus higher, raising interest on the 1.1857 and 1.1929 levels - the last of which marks both the mid-February high as well as the 61.8% retracement of the Jan 27 - Mar 13 bear leg. Despite the near-term rally, trend signals continue to highlight a dominant downtrend. Initial key support to watch lies at 1.1669, the 50-day EMA. A break of it would signal a bear reversal.

• US rates trade close to the day’s lows with SOFR futures currently as much as 9.5 ticks lower on the day in the M7, of which ~5 ticks has come in US hours, fully reversing Friday’s relief rally on the then reopening of the Strait of Hormuz.
• FF cumulative cuts from 3.64% effective: 0bp Apr, 0bp Jun, 1bp Jul, 4.5bp Sep, 6bp Oct and 9bp Dec building to 16bp Jun 2027.
• The sell-off in US hours, building on modest overnight losses, started with a particularly strong weekly ADP release (equivalent to monthly growth rate north of 200k) before little impact from a stronger than expected retail sales report.
• Since then, growing questions over whether US-Iran talks in Pakistan will go ahead ahead of tomorrow's ceasefire expiry have helped selling pressure with strong gains for crude oil futures (May WTI nearly +5%).
• It’s harder to fold Warsh’s nomination hearing into the day’s moves. Some attribute his remarks to part of the sell off although we didn’t expect him to appear firmly dovish with continued independence concerns. Nevertheless, a focus on inflation (noting cumulative price increases in the pandemic) maintained a hawkish lean as seen in the prepared remarks released yesterday with their minimal attention to the labor market. Talk of sweeping reforms also clouds initial reactions.