US TSYS: TY Trend Structure Remains Bearish Ahead Of QRA, Key Data & Alphabet
Feb-04 11:58
Treasuries are modestly cheaper overnight ahead of an important session including the full QRA (0830ET), notable data releases from ADP (0815ET) & ISM Services (1000ET) plus a President Trump interview. After the close, Alphabet earnings are in focus before Fed Governor Cook on monetary policy.
- Cash yields are 0.9-1.2bps higher across the curve.
- 10Y yields at 4.276% (+1.0bp) yesterday topped out at 4.2975% in a renewed look at the 4.30% level.
- TYH6 trades at 111-17+ (-01+) on lighter cumulative volumes of 275k after some heavier overnight sessions recently.
- It remains within yesterday’s range in moves that include a push to a low of 111-13+ as the bear trigger of 111-09 (Jan 20 low) starts to see more focus again - clearance could open the round 111-00. Support is seen at 112-02 (Feb 2 high).
- Data: MBA applications (0700ET), ADP employment Jan (0815ET), S&P Global US Services/Composite PMI Jan final (0945ET), ISM Services Jan (1000ET)
- Fedspeak: Cook on mon pol and economy (1830ET) – see STIR bullet
- Refunding: Monday’s quarterly financing estimates as usual shouldn't really change the expectations for the main event of Refunding week: the full announcement including Treasury policy statement today at 0830ET. See MNI's preview, published on Friday, here (link).
- Bill issuance: US Tsy $69B 17W bill auction (1130ET)
- Politics: Trump in TV interview (1100ET), Trump in policy meeting (1600ET)
- Earnings: Dominated by Alphabet after the close. Eli Lilly has already reported, seeing 2026 revenue at $80-83B vs estimates of $77.7B
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Historical bullets
US TSYS: Supported By US-Venezuela Developments, ISM Mfg In Focus
Jan-05 11:54
Treasuries have been increasingly supported overnight following the US capturing Venezuela’s Maduro on Saturday, with FI markets gaining but US equity futures also supported by strong gains for oil names rather than a more typical risk-off play. Today’s calendar is highlighted by ISM manufacturing.
- Cash yields are 1.5-2.5bp lower, with the belly leading declines.
- 2s10s consolidate at 71.4bp (-0.5bp) after 72.3bp on late Friday marked a fresh high since early 2022.
- TYH6 trades at 112-11+ (+05) on modest cumulative volumes of 300k.
- A bear threat remains present with support at 112-01+ (Dec 23 low) before the bear trigger at 111-29 (Dec 10 low) whilst resistance is seen at 112-20 (50-day EMA) before 112-25+ (Dec 30/31 high).
- Data: ISM mfg Dec (1000ET), Wards vehicle sales
- Bill issuance: US Tsy $86B 13W, $77B 26W bill auctions (1130ET)
- Politics: Trump participates in policy meeting w/ closed press (1530ET)
OUTLOOK: Price Signal Summary - Trend Direction In Oil Futures Remains Down
Jan-05 11:53
- On the commodity front, the trend structure in Gold is unchanged, it remains bullish and a sharp sell-off late December appears corrective - for now. The trend is overbought and a deeper retracement would allow this condition to unwind. First support at $4325.1, the 20-day EMA, has been pierced. A clear break of the average would expose the 50-day EMA at $4194.5. For bulls, a resumption of gains would open $4578.3,a 1.618 projection of the Oct 28 - Nov 13 - Nov 18 swing.
- The trend condition in WTI futures remains bearish and recent gains are considered corrective. Moving average studies are in a bear-mode position, highlighting a dominant downtrend. A resumption of the downtrend would signal scope for a move towards $53.77, a 1.764 projection of the Jul 30 - Aug 13 - Sep 26 price swing. Key short-term resistance is $61.25, the Oct 24 high. First resistance is at $58.47, the 50- day EMA.
US TSY OPTIONS: BLOCK: Feb'26 10Y Ratio Put Spread
Jan-05 11:50
- 1,000 TYG6 111.25/112.25 5x4 put spd, 1-04 net vs. 1,000 TYH6 112-12
