US TSYS: Market Roundup: Hot CPI Spurs 100Bp Hike Chances for July

US rates gapped lower following hot June CPI read (30YY hit 3.2256% high), has drawn some recent buying off lows but coming under pressure again, 30YY back to 3.1923% at the moment. Data metrics:

• CPI for Services (60% of the whole) is +0.9% MoM, +6.2% YoY.
• CPI for Goods (40%) is +2.1% MoM +13.6% YoY
• Energy prices were up 7.5% MoM, +41.6% YoY
• Food and Beverage prices rose 1.0% MoM, +10.0% YoY
• Housing related prices were up 0.8% in June.
• Owners’ Equivalent Rent was +0.7% MoM, +5.5% YoY, highest since 1990.
• Short end Eurodollar futures under heavy pressure, lead quarterly EDU2 trading 96.46 (-0.225) consistent w/ Fed Funds at 3.25%. Markets pricing in appr 40% chance of 100bp hike from the FOMC at the end of the month, more likely two concurrent 75bp hikes.
• Equities not taking kindly to the data, SPX emini ESU2 futures slipped to 3753.50 low, drawing some dip buyers 3770.0 last (-53.0).
• Technicals for TYU2: Key short-term support is at 116-11, the Jun 28 low where a break is required to strengthen a bearish threat and this would signal scope for a deeper retracement. On the upside, attention is on the short-term bull trigger at 120-16+, the Jul 6 high. A break would resume the uptrend.