Market Roundup: 2s10s 16bp Off Early Monday Highs

FI futures trading mildly weaker again, Bonds see-sawing off lower after posting modest gains after the open, yield curves flattening with short end under pressure.

• After tapping 42.0 ahead Mon's open, 2s10s down to 15.023 (-7.289) at the moment as markets start to price in the off chance of 75bp hike at the May 4 FOMC. Bbg notes Fed Swaps pricing in 250bp in hikes by year end.
• One dealers follow suit: Nomura analysts anticipate the Fed to make two consecutive 75bp hikes (June and July) after a 50bp hike on May 4:
  • "For some time, our view has been that if the Fed could hike 200bp at one meeting without significantly affecting market functioning, they would. So far, markets have been reluctant to price 75bp hikes, but stronger pricing for such a move would likely ease the path for the FOMC and participants could likely forge a consensus on such action quickly".
• Current 2YY currently 2.7533% vs. 2.7848% high; 30YY taps currently 2.9202% after tapping 2.9704% earlier. Multiple Block/crosses in 2s through 10s overnight, 2-way in 2s ahead the open.
• Technicals: Underlying bearish condition continues as moving average studies continue to point south. TYM2 at 118-21 (-3), initial key support at 118-08 (intraday low); breach opens next support level at 118-02.5 (0.618 Fibonacci projection of the Mar 7 - 28 - 31 price swing). Flipside: Initial firm resistance is unchanged at 121-09, the Apr 14 high.
• Cross-assets: Gold -$18.1 (-0.93%) at $1933.73; Crude softer, WTI -0.95 at 102.84.