US 10YR FUTURE TECHS: (Z5) Fresh Cycle High
- RES 4: 113-11+ 2.382 proj of the Jul 15 - 22 - 28 price swing
- RES 3: 113-06 2.236 proj of the Jul 15 - 22 - 28 price swing
- RES 2: 113-00 Round number resistance
- RES 1: 112-28+ 2.000 proj of the Jul 15 - 22 - 28 price swing
- PRICE: 112-24+ @ 16:54 BST Sep 4
- SUP 1: 112-01+ 20-day EMA
- SUP 2: 111-20+ 50-day EMA
- SUP 3: 111-13+ Low Aug 18 and a key support
- SUP 4: 110-25 Low Aug 1
The trend outlook in Treasury futures is bullish and Thursday’s gains reinforce this condition. The contract has traded to a fresh short-term cycle high, confirming a resumption of the uptrend. This paves the way for an extension towards 112-28+ next, a Fibonacci projection. Note that moving average studies are in a bull-mode position, highlighting a dominant uptrend. Initial support to watch is 112-01+, the 20-day EMA.
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US DATA: Delinquency Rates Rise Again On Student Loans, Broadly Flat Elsewhere
Consumer delinquency rates saw another push higher in Q2, driven by a further large jump in those for student loans as a resumption of data collection continues. A silver lining is that most other areas saw steadier transition rates into delinquency although that's already at above pre-pandemic rates.
- The NY Fed Household Debt and Credit Report saw the transition rate into serious delinquency rise 0.5pts to 2.9% for its highest since early 2014.
- However, this is driven by another lurch higher in student loan delinquency rates in Q2, the second quarter where previously missed federal student loan payments can now be reported again.
- The aggregate delinquency rate in Q2 for student loans of 10.2% is back close to pre-pandemic averages although the transition rates are materially higher (13.0% into 30+ and 12.9% into 90+). The 90+ day transition rate had previously peaked at 10.5% in data going back to 2003.
- Sticking to transition rates into serious delinquency, beyond the 4.8pt quarterly increase in student loans (to 12.9%) the next largest was +0.3pts to 1.15% for HE revolving loans (vs 0.8% in 2019). Mortgages increased 0.1pt to 1.3% (vs 1.1%), auto loans were steady at 2.9% (vs 2.35%) and credit cards dipped -0.1pt to 6.9% (vs 5.2%).
- As such, whilst student loans drove the increase in delinquency rates in 1H25, most other major lending avenues are all above pre-pandemic levels.
- From the MNI Policy Team’s write-up: "The credit scores of some of these [student loan] borrowers are falling, so that'll mean more difficult access to credit in the future," New York Fed researchers told reporters on a call. "The fact that they're falling behind their student loans suggests that their cash flows are not adequate for all their obligations," a trend worth watching over the next quarters.
FED: US TSY 52W BILL AUCTION: HIGH 3.760%(ALLOT 56.68%)
- US TSY 52W BILL AUCTION: HIGH 3.760%(ALLOT 56.68%)
- US TSY 52W BILL AUCTION: DEALERS TAKE 38.62% OF COMPETITIVES
- US TSY 52W BILL AUCTION: DIRECTS TAKE 4.81% OF COMPETITIVES
- US TSY 52W BILL AUCTION: INDIRECTS TAKE 56.57% OF COMPETITIVES
- US TSY 52W AUCTION: BID/CVR 2.85
FED: US TSY 52W AUCTION: NON-COMP BIDS $1.116 BLN FROM $50.000 BLN TOTAL
- US TSY 52W AUCTION: NON-COMP BIDS $1.116 BLN FROM $50.000 BLN TOTAL
