US TSYS: Curves Twist Steeper, Trump Demands Lower Rates, Oil Prices
Jan-23 20:45
- Treasuries look to finish Thursday's session mostly weaker, curves twist steeper after demanding that "interest rates drop immediately" when he spoke remotely to the World Economic Forum meeting in Davos, Switzerland earlier.
- Tsy 2s10s climbed to 36.088 high, 5s30s to 43.580 highs on the day, Mar'25 2Y futures +.78 at 102-23.25 while 10Y futures traded -6.5 at 108-11.5 vs. 108-06 low, still above initial technical support at 108-00/107-06 (Low Jan 16 / 13 and the bear trigger).
- Trump comments saw sudden spike higher for the Greenback that was met with an immediate reversal, highlighting the ongoing sensitivity across FX markets to any comments from the President. Following this, the greenback drifted lower, and the USD index sits around 0.15% in the red as we approach the APAC crossover.
- Stocks traded mostly higher: DJIA trades up 329.87 points (0.75%) at 44485.06, S&P E-Minis up 14.5 points (0.24%) at 6134.5, Nasdaq down 41.8 points (-0.2%) at 19966.92. Earnings expected from Texas Instruments, CSX Corp and Intuitive Surgical after the close.
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LOOK AHEAD: Thursday Data Calendar: Weekly Claims, Tsy Bills & 7Y Note Sale
Dec-24 18:38
- US Data/Speaker Calendar (prior, estimate)
- Dec-26 0830 Initial Jobless Claims (220k, 223k)
- Dec-26 0830 Continuing Claims (1.874M, 1.881M)
- Dec-26 1130 US Tsy $75B 4W, $70B 8W bill auctions
- Dec-26 1300 US Tsy $44B 7Y Note auction & $64B 17W bills
STIR: FED Reverse Repo Operation
Dec-24 18:24
RRP usage climbs to $180.989B this afternoon from $116.004B yesterday. Compares to $98.356B last Friday - the lowest level since mid-April 2021. The number of counterparties climbs to 52 from 47 prior.
US TSYS: Late Session Rebound, Post-Auction Short Sets Unwound
Dec-24 18:19
- Treasury futures look to finish Tuesday's shortened Christmas-eve session near session highs, TYH5 +2.5 at 107-17 vs. 108-19 high, after trading much of the session weaker. The 10Y contract had breached a couple levels of technical support on it's way down to 108-09.5 low, 10Y yield climbing to 4.8160% high last seen in late May.
- Rates recovered soon after the $70B 5Y note auction (91282CMD0) stopped 0.2bp through (second consecutive stop since June): drawing 4.478% high yield vs. 4.480% WI; 2.40x bid-to-cover vs. 2.43x for the prior auction.
- The bounce helped projected rate cuts into early 2025 look steady to slightly higher vs. this morning (*) as follows: Jan'25 steady at -2.1bp, Mar'25 at -12.6bp (-11.7bp), May'25 -17.2bp (-16.7bp), Jun'25 -24.6bp (-23.1bp).
- No substantive reaction to regional Fed data:
- -6.0 reading for December's Philadelphia Fed's Nonmanufacturing current regional activity index (-2.4 expected) represented a steady outturn from -5.9 prior, and suggested a regional services sector that remained "weak", per the report.
- Richmond Fed's regional manufacturing survey index came in in at -10 as expected in December, the best reading since June (-14 prior). The shipments and employment subindices were flat, but new orders saw a solid improvement to -11 from -19 prior.
- Markets closed for Christmas holiday Wednesday, Globex pre-open Wednesday evening at 1700ET/re-open at 1800ET. Full sessions Thursday & Friday.
