LNG: JKM Futures Post Record Trade Volumes

Treasuries have reversed their rally on yesterday’s payrolls report, underperforming EGBs in the process, with moves extending as US desks filter in amidst a backdrop of solid gains for WTI futures (2.1%) following Trump ordering a blockade on Venezuela oil. Today’s front-end focus will be on Waller, although impact is likely limited by US CPI coming tomorrow, before the long-end sees a 20Y auction. Long after the close, Trump addresses the nation at 9pm ET – we could hear more on the Venezuela blockade whilst WH Press Sec Leavitt yesterday said it will include his historic accomplishments with a potential tease of 2026 policy. 

• Cash yields are 2.1-3.6bp higher, with increases led by 20s/30s where today’s 20Y supply might be weighing at the margin.  
• Curves consolidate yesterday’s modest pullback off fresh recent highs for 2s10s, currently at 66.8bps off yesterday’s 69.1bp. It came within sight of April’s 73.8bp for highs since early 2022.
• TYH6 trades at 112-09+ (-07) close to recent session lows but having remained within yesterday’s range throughout, amidst light cumulative volumes of 250k.
• The technical set-up points to a bearish outlook with support at the bear trigger of 111-29 (Dec 10 low) before 111-19 (Fibo projection). Resistance meanwhile is seen at 112-22+ (Dec 16 snap high on payrolls which also met the 50-day EMA) and 112-23 (Dec 11 high).
• Data: Weekly MBA data (0700ET), Chicago Fed CARTS indicator (0830ET), Manheim used vehicle prices mid-Dec update (0900ET)
• Fedspeak: Waller (0815ET), Williams (0905ET), Bostic (1230ET) – see STIR bullet
• Coupon issuance: US Tsy $13B 20Y Bond re-open - 912810UQ9 (1300ET). Last month’s 20Y saw surprisingly little reaction to it tailing by 0.4bps and a sizeable decline in bid-to-cover from 2.73 to 2.41. Last week’s 30Y at least saw some improved demand, with the bid-to-cover firming from 2.29 to 2.36 whilst it came in nearly in-line with a 0.1bp stop through.
• Bill issuance: US Tsy $69B 17W bill auction (1130ET)
• Politics: Trump address the nation (2100ET)

• MNI: US MBA: MARKET COMPOSITE -3.8% SA THRU DEC 12 WK

You are invited to join an MNI Webcast with Alberto Musalem, President & CEO, Federal Reserve Bank of St Louis.

Details below:

• Speaker: Alberto Musalem, President & CEO, Federal Reserve Bank of St Louis.
• Topic of discussion: ‘U.S. Economy & Monetary Policy.’
• Date: Tuesday January 13 from 10am to 10:35ET; 3pm to 3:35pm GMT
• This event will be run as a Zoom Webinar and is a public, on-the-record event.

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