US TSYS: Round Number 10Y and 30Y Yields Tempt Some Entry
May-28 15:32
- A brief return to 5.00% for the 30Y yield and the 10Y yield coming just shy of 4.50% has elicited a quick bid in Treasuries, currently at 4.991% and 4.487% respectively.
- Treasuries are still close to recent session lows though in what’s been a light session for headlines.
- TYU5 trades at 110-06 (-10+) having touched 110-03+, back at the lower end of yesterday’s range. Resistance is seen at 110-21+ (50-day EMA) before a key 110-23 (May 16 high) but the bear cycle remains in play with support at 109-12+ (May 22 low).
- The earlier firming starting a little before 0900ET had coincided with a Navarro op-ed in The Hill that pushed back on the bond market reaction to Trump’s reconciliation bill, although had appeared more in keeping with a broader bid that saw further BTP outperformance (which has since been pared).
- Some recent larger flow: TU (14.4k) suggested buyer followed more recently by TU (5k) suggested seller & FV(10k)/WN(2.4k) suggested steepener.
- Quarterly roll is around 90% for most major benchmarks, including TY a little below.
- Ahead sees a 5Y auction (1300ET) before the FOMC minutes (1400ET).
- Yesterday’s 2Y auction was solid, trading through by 1bp. Last month’s 5Y traded through by 1bp and the bid-to-cover ticked up after what had previously been the lowest in nine auctions.
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FED: US TSY 26W BILL AUCTION: HIGH 4.065%(ALLOT 20.34%)
Apr-28 15:32
- US TSY 26W BILL AUCTION: HIGH 4.065%(ALLOT 20.34%)
- US TSY 26W BILL AUCTION: DEALERS TAKE 30.31% OF COMPETITIVES
- US TSY 26W BILL AUCTION: DIRECTS TAKE 9.95% OF COMPETITIVES
- US TSY 26W BILL AUCTION: INDIRECTS TAKE 59.73% OF COMPETITIVES
- US TSY 26W BILL AUCTION: BID/CVR 2.80
FED: US TSY 13W BILL AUCTION: HIGH 4.200%(ALLOT 3.63%)
Apr-28 15:32
- US TSY 13W BILL AUCTION: HIGH 4.200%(ALLOT 3.63%)
- US TSY 13W BILL AUCTION: DEALERS TAKE 27.21% OF COMPETITIVES
- US TSY 13W BILL AUCTION: DIRECTS TAKE 4.24% OF COMPETITIVES
- US TSY 13W BILL AUCTION: INDIRECTS TAKE 68.55% OF COMPETITIVES
- US TSY 13W BILL AUCTION: BID/CVR 3.10
GERMANY: CDU Approves Coalition Agreement, Focus Turns To SPD Vote
Apr-28 15:29
As was widely expected, the Federal Committee of the centre-right Christian Democratic Union (CDU) has approved the coalition agreement with the centre-left Social Democrats (SPD). The Federal Committee approved the agreement with an "overwhelming majority", according to Saxony's Minister-President Michael Kretschmer, who moderated the vote. There were no votes of abstention or opposition according to FAZ. The CDU's Bavarian sister party, the Christian Social Union, approved the agreement earlier in the month.
- Speaking after the vote, CDU leader and chancellor-in-waiting Friedrich Merz said "The CDU/CSU and SPD did not seek each other as partners; we both fought to avoid having to form a government with the other.[...] The [political] pillars we have so naturally relied on over the past years and decades are shaking around us. [...] We are united by the goal of ensuring that Germany is once again able to act from the political centre.”
- The SPD is holding a vote among its ~358k party members on whether to approve the agreement. This closes on 29 April, with the result to be announced on 30 April. In order to pass, the measure needs majority approval with a turnout of at least 20%. Despite some opposition from the more left-wing factions of the party, the SPD membership is expected to approve the agreement. This sets the stage for Merz's election as chancellor by the Bundestag on 6 May.
