US TSYS: Tsys Hold Curve Flattening Gains Ahead Wednesday's January Employ Data
Feb-10 20:35
- US Treasuries look to finish higher Tuesday, curves bull flattening (2s10s -2.617 at 68.665, 5s30s -2.461 at 108.724) with bonds outperforming. Massive block sales over a 90 minute midday period: saw -115,000 TYH6 over 90 minutes from 112-17.5 to -15, as well as -95k FVH6 from 109-11.25 to -10.
- Incidentally, Treasury futures held near highs (TUH6 104-11.88, +1.5, TYH6 +10 at 112-16) after the $58B 3Y note auction (91282CQA2) drew 3.518% high yield vs. 3.519% WI; 2.62x bid-to-cover vs. 2.65x prior.
- Treasuries gained after Peter Navarro, counselor to Pres Trump, expressed the "need to revise expectations on monthly job numbers" Bbg. (NFP for January released tomorrow).
- Taking another round of geopolitical risk with a grain of salt - markets showed little react to Pres Trump stating he may may send second carrier to Iran if talks fail, Axios reporting. Trump is meeting the Israeli PM tomorrow, with the date for the next US Iran meeting yet to be finalised.
- Japanese assets have firmed on Tuesday, bolstered by comments from Finance Minister Katayama, who appears to have successfully calmed the markets on the timing and financing of the sales tax cut. Stabilisation across the JGB curve has facilitated an extension of the Japanese yen rebound, with the USDJPY pullback from yesterday’s post-election high reaching 2.35% at today’s 154.06 low.
- All focus turns to tomorrow’s US employment data. The report will need to be assessed holistically rather than focusing on any single number, although the unemployment rate should offer the cleanest single take.
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AUSSIE 3-YEAR TECHS: (H6) Recovery Mode
Jan-10 22:45
- RES 3: 97.796 - 1.618 proj of the Sep 3 - 12 - 15 price swing
- RES 2: 96.780 - High Jun 26 (cont)
- RES 1: 96.700 - High Sep 12
- PRICE: 95.890 @ 16:40 GMT Jan 9
- SUP 1: 95.740 - Low Dec 22
- SUP 2: 95.480 - Low 1st Nov ‘23
- SUP 3: 94.932 - 1.0% 10-dma envelope
Prices bounced again Thursday, supported by strength in global bond markets and a smoother inflation picture at the December CPI print. As such, prices edged further away from recent lows. Nonetheless, slower pricing for additional RBA easing - and partial pricing for a return to rate hikes in 2026 - should keep the front-end of the curve under pressure. This keeps prices well below prior resistance at 96.615, the Sep 12 high, and refocuses attention on 95.480 as the next major support.
MNI: MNI TEST 02, Please Ignore
Jan-09 23:36
Test Test TEST
MNI: MNI Test, Please Ignore
Jan-09 23:30
Test, ignore
