STIR: US Front Rates Consolidate Recovery of Mid-Week Losses, Fed MPR Today
Jul-10 10:34
- US rates are on balance little changed overnight as they consolidate yesterday’s rally in tandem with lower crude oil future.
- Front rates have broadly reversed the previous drop on Tuesday when the Iranian oil waiver was revoked via additional losses seen Wednesday when President Trump said the Iran ceasefire is over. That’s in contrast to European rates where recoveries have been slower.
- There are no notable US data releases today, with scope for some spillover from the Canadian jobs report. However, the Fed’s semi-annual Monetary Policy Report should be published today (recent examples published 1100ET) ahead of Fed Chair Warsh’s Congress testimonies next week (House on Tue, Senate on Wed).
- FF cumulative hikes from 3.62% effective: 6bp Jul, 19bp Sep, 24bp Oct, 34bp Dec building to 42.5bp with Mar and Jun 2027.
- The SOFR peak implied yield of 4.09% (H7) continues to hold towards the middle of the rough range of 4.00-4.20% for recent weeks.
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US 10YR FUTURE TECHS: (U6) Bearish Trend Structure
Jun-10 10:33
- RES 4: 111-02+ High Apr 24
- RES 3: 110-28+ High May 7
- RES 2: 110-03 50-day EMA
- RES 1: 109-17/110-00+ 20-day EMA / High May 29
- PRICE: 109-06+ @ 11:23 BST Jun 10
- SUP 1: 108-25 Low Jun 08
- SUP 2: 108-08+ Low May 19 and the bear trigger
- SUP 3: 108-04 1.382 proj of Apr 17 - May 4 - 7 swing
- SUP 4: 107-29 1.618 proj of the Apr 17 - May 4 - 7 price swing
Treasuries remain above Monday’s low, however, a bear threat remains present. Recent weakness reinforces a M/T bearish theme and provides an early signal that the corrective cycle since May 19, is over. Resistance to watch is 110-03, the 50-day EMA. Clearance of the average would undermine the bear theme. The bear trigger lies at 108-08+, the May 19 low. A breach of this level would confirm a resumption of the downtrend.
LOOK AHEAD: Wednesday Data Calendar: May CPI Inflation, Tsy 10Y Note Re-Open
Jun-10 10:24
- US Data/Speaker Calendar (prior, estimate). All times ET
- 06/10 0700 MBA Mortgage Applications (-2.5%, --)
- 06/10 0830 CPI MoM (0.6%, 0.5%), YoY (3.8%, 4.2%)
- 06/10 0830 Core CPI MoM (0.4%, 0.3%), YoY (2.8%, 2.9%)
- 06/10 0830 Real Avg Hourly Earning YoY (-0.3%, --), Weekly (-0.2%, --)
- 06/10 1130 US Tsy $69B 17W bill auction
- 06/10 1300 US Tsy $39B 10Y Note auction re-open (91282CQQ7)
- 06/10 1400 Federal Budget Balance ($215B, -$283.1B)
- Source: Bloomberg Finance L.P. / MNI
STIR: US Rates Awaiting CPI Report, 25bp Hike Seen In Dec
Jun-10 10:20
- US rates are little changed overnight with contained broad market reaction to the US and Iran trading strikes.
- They broadly consolidate yesterday’s rally although still price a 25bp hike in December ahead of today’s US CPI report for May as they continue to reflect the significant hawkish impulse from Friday’s NFP report.
- MNI US CPI Preview: https://mni.marketnews.com/4unpjNy
- FF cumulative hikes from 3.62% effective: 0.5bp Jun, 4bp Jul, 11.5bp Sep, 15.5bp Oct, 25.5bp Dec building to 36.5bp Mar 2027 and 40bp Jun 2027.
- SOFR futures are up to 1 tick lower, with the peak implied yield of 4.06% (M7) remaining below Monday’s fresh high for the Iran conflict of 4.155%.
- The FOMC is in media blackout ahead of next week’s decision so no Fedspeak reaction to today’s report.
