US 10YR FUTURE TECHS: (M5) Key Support Remains Exposed
May-23 10:41
- RES 4: 112-20+ High May 1 and a bull trigger
- RES 3: 112-01+ High May 2
- RES 2: 111-22 High May 7
- RES 1: 110-21+ High May 16 and a key near-term resistance
- PRICE: 109-30 @ 11:30 BST May 23
- SUP 1: 109-13 Low May 22
- SUP 2: 109-08 Low Apr 11 and key support
- SUP 3: 108-26+ 76.4% retracement of the Jan 13 - Apr 7 bull cycle
- SUP 4: 108-21 Low Feb 19
A bear cycle that started early May in Treasury futures remains in play. The recent breach of 110-01+, 76.4% of the Apr 11 - May 1 bull leg, strengthened a bearish theme and has exposed key support at 109-08, the Apr 24 low and a bear trigger. Key near-term resistance has been defined at 110-21+, the May 16 high. A move above this level is required to signal a potential reversal.
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LOOK AHEAD: Wednesday Data Calendar: Fed Speak, Beige Book, S&P PMIs, 5Y Sale
Apr-23 10:39
- US Data/Speaker Calendar (prior, estimate)
- 23-Apr 0700 MBA Mortgage Applications (-8.5%, --)
- 23-Apr 0900 Chicago Fed Goolsbee opening remarks eco-summit
- 23-Apr 0930 StL Fed Musalem opening remarks Fed listens event
- 23-Apr 0935 Fed Gov Waller opening remarks Fed listens event
- 23-Apr 0945 S&P Global US Mfg PMI (50.2, 49.0), Services (54.4, 52.6), Composite (53.5, 52.0)
- 23-Apr 1000 New Home Sales (676k, 685k), MoM (1.8%, 1.3%)
- 23-Apr 1130 US Tsy $30B 2Y FRN & $60B 17W bill auctions
- 23-Apr 1300 US Tsy $70B 5Y Note auction (91282CMZ1)
- 23-Apr 1400 Fed Releases Beige Book
- 23-Apr 1435 StL Fed Musalem informal closing remarks
- 23-Apr 1830 Cleveland Fed Hammack on Fed balance sheet (text, Q&A)
- 23-Apr 0000 Building Permits (1.482M, --), MoM (1.6%, --)
- 23-Apr 0000 Fed Gov Kugler introductory remarks (time TBA)
STIR: Fed June Cut Odds Drift Further On Improved Risk Environment
Apr-23 10:34
- Fed Funds implied rates are 0.5-4bp higher for 2025 meetings with a firmer risk environment following US President Trump saying he has no intention of firing Powell (but still urges lower rates) and a softer stance on China trade.
- Cumulative cuts from 4.33% effective: 2bp May, 17.5bp Jun, 36.5bp Jul and 82.5bp Dec.
- The Dec 2025 implied rate is 3-4bps lower than overnight highs but otherwise at its highest since early last week.
- The SOFR implied terminal yield of 3.225% (SFRU6) sits +7bp on the day.
- Today’s data focus is on flash PMIs and the Fed’s Beige Book. There is another heavy line-up for Fedspeak although the ‘opening remarks’-heavy nature of today’s speaking schedule could limit content and all speakers have spoken recently.
- Yesterday’s Fedspeak ended up being surprisingly light on headlines amidst Trump’s pressure on the Fed (prior to him somewhat rolling back) although Kugler was marginally less hawkish having previously more explicitly pushed the inflation side of the dual mandate.
- Kugler (permanent voter): "I will support maintaining the current policy rate for as long as these upside risks to inflation continue, while economic activity and employment remain stable. I remain committed to achieving both of our dual-mandate goals of maximum employment and stable prices”. She had said Apr 7 that inflation was now the more pressing issue with regards to tariffs and that the Fed needs to make sure it doesn't rise.
- 0900ET – Goolsbee (’25, dove) opening remarks at economic mobility summit (text tbd)
- 0930ET – Musalem (’25, hawk) opening remarks at Fed Listens event (text tbd)
- 0935ET – Waller (permanent voter, dove) opening remarks at Fed Listens event (text only)
- 1435ET – Musalem (’25, hawk) informal closing remarks
- 1830ET – Hammack (’26, hawk) on balance sheet (text + Q&A)
GILTS: Block Flow Helps Futures to Fresh Highs
Apr-23 10:30
Little in the way of a clear fundamental driver to flag as gilt futures hit fresh session highs.
- The previously covered block buy seems to have driven the move, although a block seller (in the exact same size) then appears to limit the follow through, with the contract peaking at 93.10. Fibonacci resistance at 93.44 now eyed, as bulls look to regain some momentum.
- 10-Year yields register fresh session lows, although super-long yields respect this morning’s lowest levels.
- 10s are struggling to push meaningfully below 4.50% given the lack of fresh fundamental catalysts.
- Twist flattening bias still evident on the curve.
- BoE chief economist Pill will speak imminently.
