US TSYS: Post-PCE React
Jul-26 12:33
- Fast two-way as Treasury futures alternately gap higher, lower and back higher -- extending overnight high/low range after latest PCE comes out lower than expected, prior spending uprevised.
- Tsy Sep'24 10Y futures currently trade 110-30.5 last (+5) vs. 111-00.5, well below initial technical resistance of 111-13+/17+ (High Jul 16 / 1.382 of Apr 25-May 16-29 swing).
- Tsy curves twist flatter, 2s10s -1.193 at -20.395.
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EQUITIES: EU and US are extending losses
Jun-26 12:32
- Equities are extending losses and are under pressure like Bond futures, Emini has now drifted back into red territory, with small support moving up to 5489.75 for ESU4.
- Estoxx futures (VGU4) was already in the red, and further downside traction will open to 4920.00.
- US Tnotes and Bund are still hovering at their session lows, support for Bund is still at 131.97, and for TYU4, this comes at 110.01+.
EGB SYNDICATION: Lithuania 7-year: Books Closed
Jun-26 12:18
From Dow Jones: "Lithuania issued 1 billion euros ($1.07 billion) in July 2031-dated bonds via a bank syndicate on Wednesday, one of the lead manager banks said. Books for the transaction closed in excess of EUR3 billion, excluding joint lead manager interest, the same bank said. The spread on the bond was set 90 basis points above mid-swaps. Lead managers of the deal are Deutsche Bank, HSBC and Societe Generale".
The E1bln amount sold was below our original E1.5bln estimate, but had flagged downside risks to that expectations once the spread had been set.
CANADA: Extension Of Post-CPI Moves, Flash Wholesale Sales Ahead
Jun-26 12:17
- Can-US yield differentials have climbed further, primarily with but also a little since the GoC open (the former reflecting the new 2Y Tsy).
- At -71.4bps, it’s up from the -85bps prior to yesterday’s Canadian CPI, back at levels before the BoC rate cut on Jun 5.
- For comparison, the 5Y has lifted a further 1.6bps after 4.6bps yesterday.
- BoC-dated OIS has shifted from 15bp of cuts for June to nearer 10bps yesterday, and is currently at ~8bps although it’s early in the session to get a more accurate sense on that.
- The September meeting also shifted away from fully pricing a cut by then to very roughly a cumulative 20bps.
- Ahead, wholesale sales May advance at 0830ET after core sales rebounded 2.4% M/M in April. Yesterday’s mfg flash, entirely overshadowed by CPI, saw a sluggish 0.2% M/M after 1.1% in April.
