10s Fail To Hold Move Below 4.00%

10-Year Tsy yields can’t sustain the break below 4.00%, with TY futures running out of steam after a brief look above 112-00 (highs of 112-02).

• TY futures managed a modest breach of the Jan 17 high (112-01+), with the next level of resistance beyond there located at the at Jan 12 high (112-26+). A break above the latter is needed to turn the current corrective cycle into something more meaningful.
• The contract last trades +0-09+ at 111-29+, a little above the middle of its 0-10+ range on solid volume of ~273K.
• Cash Tsy yields are 1-3bp lower across the curve, with a light bull steepening bias seen.
• Block buys in FV (~$300K DV01 across 2 clips) & TY (~$90K) futures during Asia-Pac hours helped underpin.
• The rebound from yesterday’s lows started in NY hours, as some of the details in the JOLTS data came under greater scrutiny, while some post-big tech earnings weakness in e-minis and softer-than-expected Australian & French CPI readings have also factored in.
• FOMC-dated OIS shows ~12bp of cuts through the Mar ’24 FOMC, while ~137bp of cuts are seen through ’24 on the whole. Pricing has moved in a dovish fashion alongside the core global FI rally, as the impact of yesterday’s JOLTs data fades.
• The QRA announcement and FOMC decision dominate the NY docket today. The MNI Chicago PMI print, ADP employment reading and employment cost index will also cross.