US TSYS: Futures Flat, Cash Bull Flatter As Post-Shutdown Data Deluge Beckons
Cash Treasuries caught up with Tuesday's futures rally in the return to cash trade Wednesday, with TY futures hovering around the week's best levels.
- The curve bull flattened on the day, with Tuesday's poor weekly ADP data continuing to reverberate as we await "official" data following the conclusion of the government shutdown.
- The 10Y Note auction brought a tail (0.6bp) for a second consecutive month, but Treasuries were little moved in the aftermath. The Refunding week concludes with the 30Y auction Thursday.
- Atlanta Fed's Bostic announced his retirement at the end of his term in February 2026, and delivered a speech showing support for holding rates until there were clearer signs that inflation wasn't going to be a threat. NY's Williams repeated previous comments on Fed balance sheet policy, while Tsy Sec Bessent effectively recapped the conclusions from last week's Refunding announcement.
- Latest levels: The 2-Yr yield is down 2.7bps at 3.5638%, 5-Yr is down 4.5bps at 3.6682%, 10-Yr is down 4.9bps at 4.0674%, and 30-Yr is down 4.1bps at 4.6646%. Dec 10-Yr futures (TY) were down 1/32 at 113-00 (L: 112-27 / H: 113-2.5) - having tested key near-term resistance at 113-02, highs seen Nov 5, 7, and 11.
- Attention turns to the House vote expected at 7pm to end the government shutdown. White House's Leavitt said that it was likely October CPI and employment data would never be released - we go over prospects for those and other data releases here.
- With the expected return of government workers to their posts Thursday, we expect to soon get word on rescheduled data. However note that in 2013 we only got the BLS's updated release schedule at 4:30pm on the first day of reopening, so we won't be expecting an announcement on Thursday morning.
- However we are assured of getting some alternative data points Thursday including Chicago CARTS retail sales for October and the Dallas Fed's weekly economic index. We may also get the Department of Labor's official calculation of weekly jobless claims for the first time since the end of September, but either way we will be able to make our own estimates based on state-level data. We also hear from SF's Daly, Minneapolis's Kashkari, St Louis's Musalem and Cleveland's Hammack.
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USDCAD TECHS: Bullish Trend Structure
- RES 4: 1.4167 50.0% retracement of the Feb 3 - Jun 16 bear leg
- RES 3: 1.4111/39 High Apr 10 / 3.0% Upper Bollinger Band
- RES 2: 1.4072 Bull channel top drawn from the Jul 23 low
- RES 1: 1.4034 High Oct 9 and 10
- PRICE: 1.4029 @ 15:56 BST Oct 13
- SUP 1: 1.3916/3856 20- and 50-day EMA values
- SUP 2: 1.3795 Bull channel base drawn from the Jul 23 low
- SUP 3: 1.3727 Low Aug 29 and a bear trigger
- SUP 4: 1.3689 Low Jul 28
A bull cycle in USDCAD remains intact. Last Thursday’s rally confirmed a recent bull flag on the daily chart and a resumption of the current uptrend. Moving average studies are in a bull-mode position, highlighting a dominant uptrend. Sights are on 1.4111 next, the Apr 10 high, and further out scope is seen for an extension towards 1.4167, a Fibonacci retracement. First key support is at 1.3856, the 50-day EMA.
AUDUSD TECHS: Bearish Threat
- RES 4: 0.6726 1.236 proj of the Jun 23 - Jul 24 - Aug 21 price swing
- RES 3: 0.6660/6707 High Sep 18 / 17 and a bull trigger
- RES 2: 0.6629 High Sep 30 & Oct 01 and key short-term resistance
- RES 1: 0.6560 50-day EMA
- PRICE: 0.6513 @ 08:11 BST Oct 13
- SUP 1: 0.6473 Low Oct 10
- SUP 2: 0.6463 Low Aug 27
- SUP 3: 0.6415 Low Aug 21 / 22 and a bear trigger
- SUP 4: 0.6373 Low Jun 23
A sharp sell-off in AUDUSD on Friday resulted in a break of 0.6521, the Sep 26 low, and 0.6484, the 76.4% retracement of the Aug 21 - Sep 17 bull leg. This undermines the recent bullish theme and instead signals scope for a deeper retracement, potentially towards key support at 0.6415, the Aug 21 and 22 low. Initial resistance to watch is 0.6560, the 50-day EMA. Key short-term resistance has been defined at 0.6629, the Sep 30 and Oct 1 high.
US TSYS: Tsys Rebound Late, 2s-10s Leading on Subdued Holiday Trade
- Treasury look to settle mixed, bonds weaker on very light volumes (TYZ5 670k) due to the Columbus Day holiday. The Dec'25 10Y contract currently trades at 113-05.5 (+1) - rebounding late with no obvious headline of Block-driven support.
- Normal Globex trade hours, stocks open - recovering approximately half of Friday's rout: the DJIA trades up 575.86 points (1.27%) at 46,057.31, S&P E-Minis up 98 points (1.49%) at 6,693, Nasdaq up 467.7 points (2.1%) at 22,674.98.
- No data, but Philly Fed Pres Anna Paulson (non-2025 FOMC voter, votes in 2026) said in a speech Monday that with rates "modestly restrictive now", she sees easing through year-end in line with the September SEP median - in other words, two more cuts by year-end. That's in line with MNI's assumption of her view.
- More Fed speakers tomorrow with focus on Chairman Powell's economic outlook keynote address at the NABE Annual Meeting at 1220ET.
