US 10YR FUTURE TECHS: (M5) Overbought But Remains Bullish
- RES 4: 112-23+1.618 proj of the Jan 13 - Feb 7 - Feb 12 price swing
- RES 3: 112-18 2.0% 10-dma envelope
- RES 2: 112-13 1.500 proj of the Jan 13 - Feb 7 - Feb 12 price swing
- RES 1: 112-01/02 High Mar 4 / 1.382 proj of Jan 13-Feb 7-12 swing
- PRICE: 111-06 @ 16:34 GMT Mar 5
- SUP 1: 110-23/110-00 Low Feb 28 / High Feb 7
- SUP 2: 109-21 50-day EMA and a key near-term support
- SUP 3: 108-21 Low Feb 19
- SUP 4: 108-03+ Low Dec 12 and a bear trigger
Treasury futures traded to a fresh cycle high Tuesday, reinforcing current bullish conditions. The contract has pierced resistance at 111-22+, Dec 3 ‘24 high. A clear break of this level would strengthen a bullish theme and open 112-02 and 112-13, Fibonacci projection points. Note that the daily trend condition is overbought, a pullback would be considered corrective and allow the overbought set-up to unwind. Firm support is at 110-00, the Feb 7 high.
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US TSYS/SUPPLY: Treasury Financing Estimates To Assume QT Continues (1/2)
Our full preview of this week's quarterly Refunding went out on Friday (PDF here). While the main Refunding announcement is not until Wednesday at 0830ET, Monday’s Financing Requirements release, at 1500ET, could provide some key insights into how Treasury forecasts fiscal dynamics through the middle of calendar year 2025.
- The first caveat is that the estimates will likely have to be taken seriously but not literally. Treasury usually makes the assumption that, when applicable, the debt limit (that it is currently constrained by) will be lifted by Congress.
- It also is likely to assume that Fed QT continues to run as usual (around $75B per quarter since the middle of 2024).
- Those assumptions have large implications for the net borrowing requirements and financing needs.
- MNI is very loosely penciling in the following for Monday’s release, and it would probably require a large deviation from these to have a market impact.
OPTIONS: Expiries for Feb04 NY cut 1000ET (Source DTCC)
- EUR/USD: $1.0250(E873mln), $1.0280(E910mln), $1.0300(E1.2bln), $1.0320(E1.0bln), $1.0375(E1.0bln), $1.0395-05(E1.4bln), $1.0425-35(E2.4bln)
- USD/JPY: Y152.00($500mln), Y154.00($663mln)
- AUD/USD: $0.6275(A$1.6bln), $0.6335-50(A$896mln), $0.6420(A$1.1bln), $0.6595-00(A$2.5bln)
STIR: BLOCK: June'25 SOFR Put Fly
- 5,000 SFRM5 95.56/95.68/95.81 put flys, 4.75 ref 95.89 at 1123:56ET
