BRAZIL: Postal Service Obtains BRL12bn of Loans

Cash Treasuries caught up with Tuesday's futures rally in the return to cash trade Wednesday, with TY futures hovering around the week's best levels.

• The curve bull flattened on the day, with Tuesday's poor weekly ADP data continuing to reverberate as we await "official" data following the conclusion of the government shutdown.
• The 10Y Note auction brought a tail (0.6bp) for a second consecutive month, but Treasuries were little moved in the aftermath. The Refunding week concludes with the 30Y auction Thursday.
• Atlanta Fed's Bostic announced his retirement at the end of his term in February 2026, and delivered a speech showing support for holding rates until there were clearer signs that inflation wasn't going to be a threat. NY's Williams repeated previous comments on Fed balance sheet policy, while Tsy Sec Bessent effectively recapped the conclusions from last week's Refunding announcement.
• Latest levels: The 2-Yr yield is down 2.7bps at 3.5638%, 5-Yr is down 4.5bps at 3.6682%, 10-Yr is down 4.9bps at 4.0674%, and 30-Yr is down 4.1bps at 4.6646%. Dec 10-Yr futures (TY) were down 1/32  at 113-00 (L: 112-27 / H: 113-2.5) - having tested key near-term resistance at 113-02, highs seen Nov 5, 7, and 11.
• Attention turns to the House vote expected at 7pm to end the government shutdown. White House's Leavitt said that it was likely October CPI and employment data would never be released - we go over prospects for those and other data releases here.
• With the expected return of government workers to their posts Thursday, we expect to soon get word on rescheduled data. However note that in 2013 we only got the BLS's updated release schedule at 4:30pm on the first day of reopening, so we won't be expecting an announcement on Thursday morning.
• However we are assured of getting some alternative data points Thursday including Chicago CARTS retail sales for October and the Dallas Fed's weekly economic index. We may also get the Department of Labor's official calculation of weekly jobless claims for the first time since the end of September, but either way we will be able to make our own estimates based on state-level data. We also hear from SF's Daly, Minneapolis's Kashkari, St Louis's Musalem and Cleveland's Hammack.

• RES 4: 180.37 1.500 proj of the Jul 31 - Sep 29 - Oct 2 price swing  
• RES 3: 180.00 Psychological round number
• RES 2: 179.73 1.382 proj of the Jul 31 - Sep 29 - Oct 2 price swing
• RES 1: 179.45 High Nov 12
• PRICE: 179.19 @ 17:19 GMT Nov 12 
• SUP 1: 177.05/175.52 20- and 50-day EMA values
• SUP 2: 174.82 Low Oct 17 
• SUP 3: 173.98 Bull channel support drawn from the Feb 28 low   
• SUP 4: 173.92 Low Oct 6 and a gap high on the daily chart  

The trend in EURJPY remains bullish and today’s gains reinforce current conditions. The cross has cleared the bull trigger at 178.82, the Oct 30 high, to confirm a resumption of the medium-term uptrend. Note too that moving average studies are in a bull-mode position, highlighting a dominant uptrend. Sights are on 179.73, a Fibonacci projection, and the 180.00 psychological handle. First support lies at 177.05, the 20-day EMA.    

• Crude has fallen sharply today amid oversupply concerns after OPEC flipped its Q3 view to a surplus.
• WTI Dec 25 is down by 4.3% at $58.4/bbl.
• The November OPEC Monthly Oil Market report showed a switch from a deficit to a surplus of 500kb/d in Q3 as US production exceeded expectations.
• Excess oil supply driven by increased OPEC and non-OPEC output also remains in focus, while uncertainty remains over the impact of the latest sanctions on Russia.
• With today’s move, price has fallen below initial support at $58.83, the Nov 6 low, narrowing the gap to key support and the bear trigger at $55.96, the Oct 20 low.
• Meanwhile, spot gold has risen by a further 1.7% to $4,197/oz on Wednesday, taking it to its highest level since Oct 21.
• The move comes ahead of a US House vote to end the government shutdown this evening. A final vote is expected at around 1900ET(0000GMT).
• Today’s rally in gold has seen price rise above initial resistance at $4,161.4, the Oct 22 high. A stronger recovery would refocus attention on $4,381.5, the Oct 20 high and bull trigger.
• Elsewhere, silver has also jumped by 4.4% to $53.5/oz, taking the precious metal to its highest since Oct 17, when it reached an all-time high of $54.48.
• Trend signals in silver remain bullish and a clearance of this record high would open $55.444, a Fibonacci projection point.