US TSYS: Markets Roundup: No Scary Month End, Focus on Wed FOMC
Oct-31 19:42
- Tsy futures are drifting in steady to narrowly mixed territory late Tuesday, 10Y and 10Y Ultras closest to steady after the bell, curves flatter but off late morning lows: 3M10Y -3.522 at -60.432 vs. -68.652 low, 2Y10Y -3.147 at -19.336 vs. -22.521 low.
- Main focus on Wednesday afternoon's FOMC annc, most likely leaving rates unchanged for the 2nd consecutive meeting. Economic activity data has been strong and inflation progress has arguably stalled since the September meeting, the Committee will maintain a cautious approach as it assesses the impact of tighter financial conditions and the lagged effects of past tightening.
- Additional focus tomorrow on ADP (0815ET), the final Tsy Refunding announcement (0830ET) and JOLTS Job Openings (1000ET).
- Precursor to Wed's FOMC policy annc, soft China PMI early overnight helped prime Tsys as they broke higher after the BOJ left policy unchanged at -0.1%, left upper limit of YCC framework at 1%. Meanwhile, soft Eurozone CPI and GDP growth helping Tsys extend highs heading into the NY open.
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US TSYS: Stopgap Funding Bill Passed, US Govt Shutdown Averted, For Now
Oct-01 19:32
- Markets are likely to open on a positive tone after Congress passed a stopgap funding bill Saturday evening. The Senate voted to pass the bill on a 88 to 9 margin after the House had voted 335-91.
- Later in the evening President Biden signed the H.R. 5860 bill, "which provides fiscal year appropriations to Federal agencies through November 17, 2023, for continuing projects of the Federal Government and extends several expiring authorities." LINK
- US Treasury Secretary Yellen issued a statement applauding the bipartisan measure to avoid a shutdown.
USDCAD TECHS: Bear Trend Conditions Remain Intact
Sep-29 20:00
- RES 4: 1.3805 High Mar 24
- RES 3: 1.3705 Trendline resistance drawn from the Oct 13 2022 high
- RES 2: 1.3593/95 High Sep 12 / 7 and key resistance
- RES 1: 1.3543 High Sep 27
- PRICE: 1.3527 @ 15:53 BST Sep 29
- SUP 1: 1.3417/3381 Low Sep 29 / 19
- SUP 2: 1.3323 61.8% retracement of the Jul 14 - Sep 7 bull leg
- SUP 3: 1.3266 Low Aug 2
- SUP 4: 1.3235 76.4% retracement of the Jul 14 - Sep 7 bull leg
USDCAD remains in a corrective cycle. The short-term outlook is unchanged and a downtrend remains intact - the recent breach of 1.3490, the Sep 1 low, and the move below the 50-day EMA, reinforced a bearish theme. A resumption of weakness would open 1.3323 next, a Fibonacci retracement. Next resistance to watch is 1.3593, the Sep 12 high. Key resistance is at 1.3695, the Sep 7 high.
US TSYS: Tsys Don't Fear the Shutdown, Nor Quarter End For That Matter
Sep-29 19:43
- Support for Treasury futures continued to ebb in the second half, bonds steady briefly before climbing again on quarter/month end positioning. Tsys started to consolidate late morning - largely knock-on effect as EGB's pared gains ahead the weekend. Moves not related to impending US Govt shutdown expected to start Sunday.
- Current Dec'23 10Y futures +6 at 108-01.5 vs. 107-26 low, well above initial technical support of 107-05+ 1.382 proj of the Jul 18 - Aug 4 - Aug 10 price swing. Dec'23 30Y futures tapped steady after the bell but rebounded +7 to 113-23 on quarter/month-end extension trade.
- Curves steeper with the short end outperforming, 3m10Y +1.687 at -87.756, 2Y10Y +2.326 at -46.222.
- Treasury futures had extended highs following a raft of in-line data this morning that pointed to cooling inflation metrics heading into the fall.
- Fast two-way trade reported after initial data came out largely in-line:
- Personal Income (0.4% vs. 0.4% est)
- Personal Spending (0.4% vs. 0.5% est, prior up-revised to 0.09%)
- Real Personal Spending (0.1% vs. 0.0% est)
- PCE Deflator MoM (0.4% vs. 0.5% est), YoY (3.5% vs. 3.5% est)
- PCE Core Deflator MoM (0.1% vs. 0.2% est), YoY (3.9% vs. 3.9% est)
- Little observable reaction to lower than est. Chicago PMI (44.1 vs. 47.6 est, 48.7 prior) and after slightly higher UofM consumer sentiment at 68.1 vs. 67.7 est, 1- and 5Y inflation expectations in-line with expectations of 3.2% and 2.8% respectively.
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