US TSYS: Firmer Amidst Low Volumes, Multiple Focal Points For Today's Session
Apr-24 10:52
- Treasuries appear to have been supported overnight by a softer risk environment with China refuting there have been US-China consultations or negotiations on tariffs, rather than the selling pressure seen on risk-off of recent weeks.
- Today sees wide-ranging focus, with data including jobless claims and durable goods, potential headlines from a Bessent-Kato meeting after the G20 FinMin meeting press conference scheduled for 1210-1240ET and a 7Y auction.
- Yesterday’s 5Y auction saw a decent 1bp stop through but foreign demand looked weaker with a sharp pull back for indirect take up (from 76% to 64%).
- Cleveland Fed’s Hammack (’26 voter) said yesterday that slowing the pace of balance sheet runoff will allow QT to continue for longer, approaching “the ‘just-above-ample’ point carefully”.
- Cash yields are 2-4.5bp lower on the day, with declines led by the belly.
- TYM5 sits at 110-28 (+07) on particularly low volumes of 235k, within yesterday’s wide range of 110-18+ to 111-18+.
- Yesterday’s 111-18+ sets latest initial resistance for another step towards a notable 111-25 (50% retrace of Apr 7-11 bear leg). The subsequent reversal however lends support to the technical view that gains are corrective, with support seen at 110-15 (Apr 15 low).
- Data: Durable goods Mar prelim (0830ET), Weekly jobless claims (0830ET), Chicago Fed national index Mar (0830ET), Existing home sales Mar (1000ET), Kansas Fed mfg Apr (1100ET)
- Fedspeak: Kashkari (’26) – see STIR bullet
- Coupon issuance: US Tsy $44B 7Y Note auction - 91282CNA5 (1300ET)
- Bill issuance: US Tsy $85B 4W & $75B 8W bill auctions (1130ET)
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GILTS: First Support In Futures Breached, Bears Now Look To Key Support
Mar-25 10:50
Early session lows in gilt futures held in the wake of the previously identified soft demand at the 4.75% Oct-43 auction.
- However, subsequent pressure in wider core global FI markets, alongside a continued extension higher in European equities, has pushed gilt futures through first support (91.07).
- The contract trades as low as 91.01, with bears now targeting key support at the Mar 6 low (90.71) as they look to deepen their technical control.
- Yields are 3-4bp higher across the curve, light steepening still intact.
US TSYS: TYA Testing Another Support; Confidence, Kugler and 2Y Supply Ahead
Mar-25 10:48
- Treasuries are again testing lows amidst a broader sell-off, with EGBs ostensibly underperforming on the day although much of that looks like catch-up for price action since yesterday’s close.
- Today’s see consumer confidence headline various second tier data releases, permanent voter Kugler speaking for the first time since last week’s FOMC and 2Y supply after last month’s booming demand from indirects.
- US equity futures hold onto the bulk of yesterday’s strong gains whilst crude oil futures have modestly extended gains.
- Cash yields are 2-3bp higher on the day, whilst 2s10s at 31bp (+0.6bp) is within recent ranges.
- TYM5 is again testing recent lows after yesterday’s clearance of 20-day EMA support, with a latest low of 110-10 (-07+) dipping through 110-12+ (Mar 6/13 lows). Volumes are reasonable at 325k.
- A clearer break could open 110-05+ (50-day EMA) before a key 110-00 (Feb 7 high), although the trend structure remains bullish with resistance at 111-17+ (Mar 20 high).
- Data: Philly Fed non-mfg Mar (0830ET), FHFA/S&P CoreLogic house prices Jan (0900ET), Conf. Board consumer survey Mar (1000ET), New home sales Feb (1000ET), Richmond Fed mfg Mar (1000ET)
- Fedspeak: Kugler on economy (text only), Williams opening remarks (text only)
- Coupon issuance: US Tsy $69B 2Y Note auctions - 91282CMV0 (1300ET). Last month’s 2Y auction stopped through by 1bp whilst indirect take surged to a new high of 85.5%, bouncing from 65.0% to clear the previous high of 82.1% in December.
- Bill issuance: US Tsy $70B 6W bill auction (1130ET)
OPTIONS: Expiries for Mar25 NY cut 1000ET (Source DTCC)
Mar-25 10:37
- EUR/USD: $1.0850(E1.2bln), $1.0900(E1.2bln)
- GBP/USD: $1.2835(Gbp578mln)
- AUD/USD: $0.6255-65(A$674mln), $0.6350-60(A$1.1bln)
- USD/CAD: C$1.4550($631mln)
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