FED FUNDS FUTURES: Large Oct'25 FF Sale

• US TSY 52W AUCTION: NON-COMP BIDS $1.043 BLN FROM $50.000 BLN TOTAL

• The Atlanta Fed’s GDPNow has seen a decent mark lower today on account of ISM manufacturing and construction spending data.
• Real GDP growth is currently seen at 3.0% in Q3 vs 3.5% in Friday’s update taking into account of Q2 national accounts and July PCE.
• PDFP meanwhile is seen running at circa 1.7% annualized in Q3 after two quarters of 1.9% (with that 1.9% in Q2 last week revised firmly higher from the 1.2% in the advance release) and 3.0% averaged in 2024.
• The downward revision to GDP growth tracking was driven by, somewhat surprisingly, consumer spending (-0.37pps) and, less surprisingly after further weak construction spending, non-residential investment (-0.25pps).
• Offsetting this was 0.11pp upward revision to the net exports contribution, leaving it an even more confusing 0.6pps considering the surprise strength in imports seen in July advance trade data. As noted last week, this is likely down to treatment of the industrial supplies series ahead of the full details being known on Sep 4 (when we can more accurately strip out gold). 

• RES 4: 113-06   2.236 proj of the Jul 15 - 22 - 28 price swing
• RES 3: 113-00   Round number resistance  
• RES 2: 112-28+ 2.000 proj of the Jul 15 - 22 - 28 price swing  
• RES 1: 112-20+ High Aug 28 / 29 
• PRICE:‌‌ 112-05 @ 16:50 BST Sep 2
• SUP 1: 111-31   20-day EMA
• SUP 2: 111-18+ 50-day EMA
• SUP 3: 111-13+ Low Aug 18 and a key support  
• SUP 4: 110-25   Low Aug 1 

The trend outlook in Treasury futures is bullish and the latest pullback appears corrective. Last week’s gains delivered a print above 112-15+, the Aug 5 high and a bull trigger. A breach of this hurdle confirms a resumption of the bull cycle and paves the way for a climb towards the 113-00 handle. Moving average studies are in a bull-mode position, reinforcing a bull theme. First support to watch is 111-31, the 20-day EMA.