US TSYS: Modestly Lower, Tracking EGBs
Jan-23 11:45
- Treasuries trade bear steeper as US desks filter in, with the earlier sell-off coming through London hours on broader FI moves rather than anything US-centric.
- A lift in oil and European natural gas futures has possibly helped the move along with French supply.
- Today's scheduled focus is likely on the weekly jobless claims report whilst US coupon supply is limited to 10Y TIPS.
- Cash yields are 0.0-2.5bp higher, bear steepening as they continue to pare the flattening seen earlier in the week.
- 2s10s at 33.6bps (+2bp) is at highs since prior to President Trump’s inauguration but still low for January prior to that.
- TYH5 has recently seen session lows of 108-10+ in a move closer to Monday’s low of 108-08+ seen prior to the WSJ ‘no tariffs on day one’ report. Cumulative volumes are light at 255k.
- The medium-term trend condition remains bearish with firmer support seen at 108-00 (Jan 16 low), whilst resistance is seen at 109-04 (Jan 21 high).
- Data: Jobless claims with initial claims covering the payrolls reference period (0830ET), Kansas City mfg Jan (1100ET)
- Coupon issuance: US Tsy $20B 10Y TIPS auction - 91282CML2 (1300ET)
- Bill issuance: US Tsy $95B 4W, $90B 8W bill auctions (1130ET)
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US TSYS: Tsys Inching Lower, 10Y Yield Climbs to 4.6048%, 7-Month High
Dec-24 11:43
- Christmas markets in full control: Treasuries are mildly lower at the moment, extending lows after narrow overnight range on extremely light volumes (TYH5 just over 110k).
- The Mar'25 10y contract trades 108-14.5 last (-0.5) - just through initial technical support of 108-16.5 (Dec 19 low). Focus on next support at 108-12.5 (1.382 proj of the Oct 1 - 14 - 16 price swing) followed by 108-00 (1.500 proj of the Oct 1 - 14 - 16 price swing ).
- Treasury 10Y yield tapping 4.6048% (+.0182) highest level since late May.
- Session data limited to regional Fed data: Philadelphia Fed Non-Mfg Activity at 0830ET, Richmond Fed Mfg Index at 1000ET.
- Treasury supply for the last minute shoppers: $28B 2Y FRN & $70B 5Y Note auctions at 1130ET.
- Early close at 1300ET for Christmas eve, full close tomorrow (Globex re-open Wednesday at 1800ET) - back to full session trade Thursday and Friday.
CROSS ASSET: US 10yr Yield tests 4.60%
Dec-24 11:36
- EURUSD edges to 1.0400, with a broader bid going through for the EUR, testing session high versus the CHF, CAD, NOK, SEK, and AUD.
- Closest resistance for the EUR is against the NOK, at 11.892, last Week's high and the highest printed level since the 6th November.
- The Dollar remains in the Green overall, TYH5 is sold in 4k to push the contract through its session low.
- The US 10yr is again testing the 4.60% handle, and the Next area of interest in Yield is at 4.6357%, which would equate to 108.10.
US TSY OPTIONS: Large Feb'25 10Y Put Spread
Dec-24 11:31
- 20,000 TYG5 107.5/108.5 put spread, around 24 ref 108-16.5
