US TSYS: FOMC Bull Steepening Consolidated, Claims and 30Y Supply Ahead
Dec-11 11:52
Treasuries have seen two-sided flow overnight, especially at the long-end, but are back to little changed as they consolidate yesterday’s FOMC communications being less hawkish than expected. Today’s focus will be on jobless claims data after a surprise dip last week and then 30Y supply with four of the past five months tailing.
- Cash yields are 0.6-1.6bp lower on the day, with declines led by 5s and 7s.
- Curves also hold yesterday’s steepening, with 5s30s at 106.5bps vs ~101bp before the FOMC.
- TYH6 trades at 112-14+ (+07+) off an earlier high of 112-18+, on solid overnight volumes of 405k as regional markets react to yesterday’s FOMC announcements
- Yesterday’s push higher is deemed a corrective bounce, lifting off yesterday’s latest lows of 111-29 (which had started to eye Fibo projection support at 111-19) with clearance of resistance at 112-10+ (Nov 20 low). Next resistance is seen at 112-24 (20-day EMA).
- The biggest surprise at yesterday's Fed decision was the announcement of $40bln in monthly RMPs, starting Friday vs our expectation of 1H26.
- Data: Weekly jobless claims (0830ET), International trade Sep (0830ET), Wholesale sales/inventories Sep/Sep F (1000ET), State labor data Sep (1000ET), Dallas Fed Weekly economic index (1130ET)
- Coupon issuance: US Tsy $22B 30Y Bond action re-open - 912810UP1 (1300ET). Last month’s 30Y tailed by 1bp, a fourth tail in the last five, and saw mixed-to-weak peripheral stats including notably a second lowest bid-to-cover since Nov 2023.
- Bill issuance: US Tsy $85B 4W & $80B 8W bill auctions (1130ET)
- Politics: WH Press Sec Leavitt briefing (1300ET), Trump in signing ceremony (1645ET), Trump remarks at Congressional Ball (2015ET)
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OUTLOOK: Price Signal Summary - Bull Flag Formation In WTI
Nov-11 11:52
- On the commodity front, the downleg in Gold since Oct 20 appears to have been a correction and has allowed an overbought condition to unwind. Recent gains also suggest the correction is over. Price remains above a key support at the 50-day EMA, at $3890.0.0. Clearance of this EMA would signal scope for a deeper retracement. Initial resistance is at $4161.4, the Oct 22 high. A stronger recovery would refocus attention on $4381.5, the Oct 20 high and bull trigger.
- Recent weakness in WTI futures appears to be a flag formation - a bullish continuation pattern. This suggests that an upward corrective cycle remains intact for now. Price has recently traded through the 50-day EMA, at $60.84, signalling scope for a stronger recovery. Note too that resistance at $62.34, the Oct 8 high, has been pierced. A clear move through it would expose key resistance at $65.77, the Sep 26 high. The bear trigger is $55.96, the Oct 20 low.
US TSYS: Light Volumes With Veterans Day, Weekly ADP Series To Headline
Nov-11 11:52
- Treasuries are little changed after thin overnight trading, with cash closed for Veterans Day.
- The Senate has passed a funding package to reopen the US government, with the package heading to the House of Representatives. We see the government on track to re-open on Wednesday.
- The weekly ADP series headlines today’s docket after last week’s clear sensitivity to alternate labor indicators.
- TYZ5 trades at 112-21 (-00+) having kept to narrow ranges in what has been a very quiet overnight session with cumulative volumes only just over 100k.
- A key near-term resistance is seen at at Friday's joint high of 113-02 (Nov 5 & 7 highs), but a bear threat is still present at 112-06 (Sep 25 low) before which lies 112-09+ (Nov 5 high) and other various support levels.
- Data: NFIB Oct (already released), ADP weekly (0815ET), Redbook retail weekly (0855ET)
- Fedspeak: Fed Gov. Barr on AI and innovation in Singapore (2225ET)
- No issuance with Veterans Day.
- Politics: Trump participates in Wreath Laying Ceremony and delivers remarks (1100ET)
LOOK AHEAD: Tuesday Data Calendar: Cash Closed for Veterans Day, Weekly ADP
Nov-11 11:49
Quiet day ahead due to Veterans Day holiday - focus on weekly ADP employment data. Cash FI markets closed but futures are open on Globex; NYSE and Nasdaq are open. The Senate passed a stopgap bill last night to fund the US Govt through January 30. Vote goes to the House tomorrow - as early as 1600ET, according to a notice from GOP Whip Tom Emmer.
- US Data/Speaker Calendar (prior, estimate)
- 11/11 0600 NFIB Small Business Optimism: reported 98.2, down from 98.8 prior
- 11/11 0815 Weekly ADP "Employment Pulse"
- 11/11 2225 Fed Gov Barr on AI & innovation
- Source: Bloomberg Finance L.P. / MNI
