EM CEEMEA CREDIT: Senegal: Headlines

SGE (20th Mar) 50p, bought for 2.52 in 5k.

• Treasuries trade modestly lower overnight, more clearly back into yesterday’s range.
• It could be a confluence of factors including pre-FOMC positioning, expectations ahead of tomorrow’s Trump-Xi meeting and supply somewhat underpinning EGB yields.
• Cash yields are ~1bp higher across the curve.
• TYZ5 trades at 113-13+ (-01+) on light cumulative volumes of 210k.
• Support is seen at 113-04 (Oct 27 low) in a move that cleared the 20-day EMA, next opening 112-26 (50-day EMA). Recent weakness appears to be corrective though with a bullish structure still in place, with resistance at 113-24 (post-CPI high) before 114-02 (Oct 17 high).
• Additional levels to watch with today’s FOMC in mind:
  • 2Y yield: Having fallen to its lowest level since August 2022 in mid-Oct to 3.374%, some might look to fade off the 50d MA of 3.562% (equating to 104-07) as the 2Y yield recovers (currently 3.500%).
  • 10Y yield: Risks look tilted to the downside when looking over the medium term with the 50d MA providing resistance since August. The October low is 3.9342% whilst next support moves back up to circa 3.90% (23.6% retrace of the 2020/2023 range). Currently at 3.987%.
  • US 5s/30s at 93.3bp now targets the August low at ~91.92, whilst 2s/10s at 48.9bps is finding some support ahead of 46.96 (Sept low).
• Data: MBA mortgage applications (0700ET), Pending home sales Sep (1000ET)
• Fed: FOMC decision (1400ET), Powell press conference (1430ET)
• FRN issuance: US Tsy $30B 2Y FRN - 91282CPG0 (1130ET)
• Bill issuance: US Tsy $69B 17-wk bills (1130ET)
• Politics: Trump in South Korea, currently at APEC leader’s working dinner, with nothing scheduled for the rest of the day. He meets China’s Xi mid-morning local time tomorrow. 

ERZ5 97.9375/98.0625/98.1875c fly, bought for 2.5 in 3k.