US TSYS: Modestly Firmer After Solid Paring Of Early Losses
Apr-11 11:03
- Treasuries trade modestly firmer on the day considering the huge ranges seen this week, with latest levels masking impressive intraday gains in the long end of the curve.
- Curves have flattened since China’s retaliation of upping tariffs on US imports to 125% and saying that’s the highest it will impose.
- Today sees US PPI and the U.Mich survey, further Fedspeak and additional interest from earnings (MNI full earnings schedule: https://mni.marketnews.com/4cnn1GO).
- There will likely continue to be heightened sensitivity to US policy and trade retaliation headlines, with positioning flows emerging ahead of the weekend.
- Cash yields are 1.7-4.1bp lower on the day, with declines led by 30s.
- 30Y yields hit 4.95% early in Asia trade in a continuation of steepening seen, despite yesterday’s strong auction, but has since pulled back to 4.827% at typing. Recall it briefly topped 5% on Wednesday, broadly meeting the Jan 14, 2025 high at a level last seen in Oct 2023 and before that 2007.
- 5s30s at 78bps has given back some of yesterday’s push higher having closed the gap to pre-90-day pause levels of 85bps via sustained lows of 66-67bps.
- TYM5 trades at 110-17 (-02) off recent highs of 110-21, on solid cumulative volumes of 575k.
- The overnight low of 110-01+ stopped just short of Wednesday’s 110-01 having on three occasions now come close to probing trendline support at 110-00 (drawn from Jan 13 low). Clearance here could open 109-13+ (Feb 24 high) whilst resistance is seen at 112-08 (Apr 8 high).
- Data: PPI Mar (0830ET), U.Mich Apr prelim (1000ET)
- Fedspeak: Kashkari (0800ET), Colins (0900ET), Musalem (1000ET), Williams (1100ET) – see separate post
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