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The Dust Settles After ECB

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10YY Well Below 3.0%

US TSYS

Month-end risk-off tone held in late trade, Tsys near late session highs after the bell, 30YY slips to 3.1163% low, 10YY well below 3.0% to 2.9685% - lowest since June 10. Meanwhile, stocks trade weaker - but trading off midmorning lows after the rate close, SPX ESU2 futures around 3797.0 at the moment.

  • Tsys loosely tracked higher EGBs coming into the session, extended gains post-data: PCE deflator and May spending on the soft side (0.2% vs. 0.4% est), on top of prior personal spending revised lower. Not much of a reaction as Chicago PMI tumbled to 56.0 in June, giving back last month's recovery.
  • Month/half-yr end as trading desks continue to mull hard landing after Wed's central bank policy meeting in Sintra. Tsy extension est +.07yr.
  • Technicals for TYU2: Treasuries have recovered from Tuesday’s low of 116-11. Key short-term resistance is unchanged at 118-09+, the Jun 30 high where a break would signal a resumption of recent gains. This would open the 50-day EMA, at 118-16 - an important short-term pivot resistance.
  • Note that the primary trend is down. Initial firm support to watch is 115-20, the Jun 17 low. A breach would expose 114-07+, the bear trigger.
  • Reminder, slightly early close Fri (1300ET) going into extended 4th of July holiday.
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Month-end risk-off tone held in late trade, Tsys near late session highs after the bell, 30YY slips to 3.1163% low, 10YY well below 3.0% to 2.9685% - lowest since June 10. Meanwhile, stocks trade weaker - but trading off midmorning lows after the rate close, SPX ESU2 futures around 3797.0 at the moment.

  • Tsys loosely tracked higher EGBs coming into the session, extended gains post-data: PCE deflator and May spending on the soft side (0.2% vs. 0.4% est), on top of prior personal spending revised lower. Not much of a reaction as Chicago PMI tumbled to 56.0 in June, giving back last month's recovery.
  • Month/half-yr end as trading desks continue to mull hard landing after Wed's central bank policy meeting in Sintra. Tsy extension est +.07yr.
  • Technicals for TYU2: Treasuries have recovered from Tuesday’s low of 116-11. Key short-term resistance is unchanged at 118-09+, the Jun 30 high where a break would signal a resumption of recent gains. This would open the 50-day EMA, at 118-16 - an important short-term pivot resistance.
  • Note that the primary trend is down. Initial firm support to watch is 115-20, the Jun 17 low. A breach would expose 114-07+, the bear trigger.
  • Reminder, slightly early close Fri (1300ET) going into extended 4th of July holiday.