US TSYS: Modestly Bull Steeper Ahead Of A More Important Data Docket
Dec-03 11:51
Treasuries trade modestly bull steeper, partly better reflecting the latest increase in the likelihood that NEC’s Hassett is chosen as the next Fed Chair. Volumes are thin however ahead of the start of this week’s more notable labor releases plus ISM services for November before next week’s FOMC decision and new economic forecasts.
- Cash yields are 1-2bp lower on the day.
- 5s30s has extended yesterday’s steepening, currently at 109.7bp having earlier nudged 110bps to test steepest levels since the first half of September.
- TYH6 trades at 113-01 (+04+) on very thin cumulative volumes of 215k, steadily rising off yesterday’s latest low of 112-22 but still some way from reversing Monday’s losses attributed to rate locks and speculative selling.
- Support is seen at that 112-22 before 112-10+ (Nov 20 low), having already breached an important support at the 50-day EMA, whilst resistance is seen at 113-11 (Dec 1 high) before 113-22+ (Nov 25 high).
- Data: Weekly MBA mortgage data (0700ET), ADP employment Nov (0815ET), Import/export prices Sep (0830ET, shutdown catch-up), IP/Cap Util Sep (0915ET, shutdown catch-up), S&P Global US services PMI Nov final (0945ET), ISM Services Nov (1000ET)
- For more context here, see US OUTLOOK/OPINION: ISM Services Seen Dipping In Nov Despite More Optimistic PMI (Dec 2, 1600ET) and US OUTLOOK/OPINION: Weekly Tracking Suggests ADP Downside Surprise (Dec 3, 0608ET)
- Bill issuance: US Tsy $69B 17W bill auction (1130ET)
- Politics: Trump to make an announcement (1430ET)
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EFSF ISSUANCE: Dual-tranche mandate: New 5-year / 2.875% Jan-35 tap
Nov-03 11:46
- "EFSF has mandated BNP Paribas, BofA Securities, and NatWest to joint lead manage its upcoming dual-tranche transaction consisting of a 5yr EUR Benchmark maturing 11th November 2030 and a tap of the outstanding senior unsecured EUR 4bn 2.875% notes due 29th January 2035 (EU000A2SCAS8)."
- "The transaction is expected to be launched and priced in the near future, subject to market conditions."
From market source
Note: MNI expects this dual-tranche transaction to be the last of the year and to raise the remaining E4.5bln from the EFSF's 2025 funding plan.
LOOK AHEAD: RESEND: Monday Data Calendar: Fed Speak, S&P Mfg PMI, Flash ISM
Nov-03 11:45
Construction Spending data from the US Census Bureau suspended due to ongoing US Gov shutdown.
- US Data/Speaker Calendar (prior, estimate)
- 11/03 0700 Fed Gov Miran on Bbg TV
- 11/03 0945 S&P Global US Mfg PMI final (52.2, 52.2)
- 11/03 1000 ISM Manufacturing (49.1, 49.5)
- 11/03 1000 ISM Prices Paid (61.9, 62.5)
- 11/03 1000 ISM New Orders (48.9, --)
- 11/03 1000 ISM Employment (45.3, --)
- 11/03 1130 US Tsy $86B 13W & $77B 26W bill auctions
- 11/03 1200 SF Fed Daly moderated discussion (no text)
- 11/03 1400 Fed Gov Cook outlook, mon-pol (text, Q&A)
- 11/03 Wards Total Vehicle Sales (16.39M, 15.5M)
- Source: Bloomberg Finance L.P. / MNI
OPTIONS: Expiries for Nov3 NY cut 1000ET (Source DTCC)
Nov-03 11:44
- EUR/USD: $1.1400(E686mln), $1.1450(E772mln), $1.1600(E561mln), $1.1695(E614mln)
- USD/JPY: Y150.00($1.1bln)
- USD/CAD: C$1.3980-85($1.1bln)
