PRECIOUS METALS: Extend To New Highs As The USD Continues To Slide

• China's bond futures are marginally lower today after yet another liquidity withdrawal by the PBOC during this morning's OMO.  
• December has seen withdrawals for a second month by the PBOC with markets volatility relatively low.  
• The 10-Yr bond future is flat today at 108.20 and remains at the mid point between the 200-day EMA of 108.30 as topside resistance and downside resistance from the 100-day EMA of 108.09.
• The 2-Yr bond future is down -.01 today at 102.51 and remains above all major moving averages. Below is the 200-day EMA of 102.49.
• Cash remains steady with the 2-Yr at 1.358%.  The 2-Yr has traded in a tight range of 1.35-1.45% over the last month.  
• The 10-Yr is at 1.83%, marginally lower in yield today.  The 10-Yr has traded in a 1.81-1.85% range over the last month.  

Bitcoin had a range overnight of $86,550.09k - $88,302.00k, Asia is currently trading around {XBTUSD Curncy}. Bitcoin continues to consolidate below the $90k area but has not been able to participate in the melt-up in risk seen in stocks and precious metals. For the time being the downward pressure seems to have been alleviated, though technically it remains in a downward trend. We are at the bottom end of its recent $84k-$96k range, and while it remains in a downtrend any bounce back toward the $95-$100k area looks likely to be faded initially. We are sitting just above the first support in the $84k-$86k area which has proved to solid recently, a break below here and the market will turn its focus back toward the $70k-$75k support which is the very well known line in the sand for the huge Bitcoin "treasury" company Strategy. 

• It looks as though some big expiries roll off this week, perhaps that can allow the market more freedom to move again.
• Bitcoin Archive on X: “$23.6 BILLION Bitcoin options to expire Friday. Calls are clustered at $100,000 and $120,000. Puts are concentrated around $85,000. Max Pain is $96,000. One of the biggest Bitcoin options expiry events of all time.” See Graph Below
• Bitcoin’s Average True Range(ATR) for the last 10 Trading days: $3,230 

Fig 1: Bitcoin Open Option Interest

Source: MNI - Market News/@BitcoinArchive

The US 10-Yr bond future finished down -01 at 112-09+ overnight, with most moves seen in cash trading.  TYH6 remains wedged between the topside resistance of the 100-day EMA of 112-14+ and the downside resistance of the 200-day EMA at 111-31.  TYH6 has opened up in the Asia trading day at 112-09 with volumes extremely low and has edged higher to 112-11+.  TYH6 remains wedged between the topside resistance from the 100 day EMA of 112-14+ and the downside resistance from the 200-day EMA of 111-31.

Treasuries finished mixed overnight, curves twist flatter (2s10s -1.733 at 63.666) with 2s-10s weaker vs. modest gains in Bonds. Futures gapped lower after stronger than expected economic data while projected rate cut pricing in-turn consolidated with the June '26 now the first FOMC date to price in a 25bp cut.

Cash is modestly better today with yields -0.5 -0.8bps lower, with volumes low.

• The 2-Yr was up +3.1bps overnight to 3.534%, and is currently 3.533%
• The 5-Yr was up +2.3bps to 3.737%, and is currently 3.731%
• The 10-Yr was flat at 4.167%, and is currently 41.59%
• The 30-Yr was down -1.2bps at 4.826%, and is currently 4.82%

• The US$70bn 5-Yr auction was in line with yield expectations as yields crept higher during the day with a bid to cover of 2.35x, weaker than the last 5-Yr auction.
• Key last night was 3Q GDP which topped expectations at 4.3% annualized, the fastest pace in two years with resilient consumer and business spending.  Exports jumped 8.8%, while imports decreased by 4.7%, providing a significant 1.59 percentage point boost to the headline GDP.  Government spending recovered to a 2.2% growth rate, supported by increased national defense expenditures.
• Treasury Secretary Bessent covered multiple topics of interest on the future of the Federal Reserve in a recording of the "All-In Podcast" out Monday.  The first point of interest was a hint that the White House would select a non-current Fed official as its next Fed Chair. Bessent, who is leading the search on behalf of the White House, said that Fed Gov Miran will be "going back to CEA [White House Council of Economic Advisers], probably in February or March".
• Projected rate cut pricing vs. early US morning levels (*): Jan'26 at -3.3bp (-4.4bp), Mar'26 at -11.3bp (-14.8bp), Apr'26 at -17.3bp (-21.9bp), Jun'26 at -30bp (-34.8bp).
• Markets close early (1315ET) Wednesday for Christmas eve, re-open for electronic trade Thursday evening for Friday: