US 10YR FUTURE TECHS: (U5) Monitoring Support

• RES 4: 111-30   76.4% retracement of the May 1 - 22 downleg
• RES 3: 111-19+ 1.0% 10-dma envelope
• RES 2: 111-14+ High Jun 5 & 61.8% of the May 1 - 22 downleg
• RES 1: 110-20   50-day EMA   
• PRICE:‌‌ 110-10 @ 11:13 BST Jun 10
• SUP 1: 109-26   Low May 29          
• SUP 2: 109-12+ Low May 22 and the bear trigger 
• SUP 3: 109-09+ Low Apr 11 and key support
• SUP 4: 108-25+ 0.764 proj of the Apr 7 - 11 - May 1 price swing

The recent reversal lower in Treasury futures, undermines the current bullish theme. An extension down would expose support at 109-26, the May 29 low, where a break would open key support and the bear trigger, at 109-12+, the May 22 low. Key short-term resistance has been defined at 111-14+, a Fibonacci retracement and the Jun 5 high. Clearance of this hurdle would be bullish.

• We have published and e-mailed to subscribers the MNI US CPI Preview.
• Please find the full report including MNI analysis plus detailed analyst estimates, here: https://media.marketnews.com/USCPI_Prev_Jun2025_a86717a017.pdf

• Analyst unrounded estimates see core CPI inflation accelerating mildly to 0.27% M/M (median, 0.28% average) in May after 0.24% M/M in April.
• We’ve seen an unrounded range of 0.23-0.34% M/M, with some sizeable discrepancies in used cars and lodging away from home as well as a CPI-specific airfares.
• The broad assumption is that May could have started to see a greater tariff impact than April but that firmer increases are more likely to show in summer months.
• Both headline and core CPI Y/Y inflation should firm one to two tenths after lows since early 2021, whilst the six-month core rate should see a similar print after four months running hotter than the Y/Y.
• We have seen preliminary core PCE estimates center on 0.22% M/M for May (median, 0.24% average), due the usual updates after Wednesday’s CPI and Thursday’s PPI. One area to watch in the latter will the extent of a bounce in portfolio management and investment advice after sliding with equities in April.
• The Fed rate path is close to its most hawkish since February, with a next cut fully priced for October.
• A dovish surprise could see a more limited reaction on the assumption that strength is yet to come for consumer prices, unless it’s seen across some of the less volatile services components. On the flipside, an upside surprise can see a further kicking out of rate cut expectations and could tee up a hawkish Fed SEP. 

• Spread set earlier: 1.125% Nov-37 I/L gilt +11.75bp (guidance was +11.75/+12.25bps)
• Size: GBP5.5bln (MNI expect GBP3.5-5.0bln nominal )
• Books closed in excess of GBP61bln (inc JLM interest of GBP5.5bln)
• Hedge ratio 55% vs 1.125% Nov-37 I/L gilt
• Maturity: 22-Sep-38
• Exp. Settlement: 11-Jun-25 (T+1)
• Coupon: 1.75% SA, ACT/ACT, short first to 22-Sep-25
• ISIN: GB00BMY62Z61
• Joint Leads: Barclays (B&D/DM), Citi, Nomura, RBC
• Timing: Hedge deadline 11:30BST. Pricing to follow.