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Bonds extend gains post the US PCE miss

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Post-Claims, PCE React

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30YY Comfortably Over 3% Again

US TSYS
BulletMarketsFixed Income
Rates finished broadly weaker Monday, near session lows on deceptively robust volumes (TYM2> 1.5M, FVM2>1.4M) for an otherwise quiet session. Yield curves bear steepened with bonds leading the sell-off, 30YY comfortably above 3% at 3.0696% (+.0837) after the close. Robust futures volumes tied to increase in Jun/Sep rolls ahead May 31 First Notice w/ FVM/FVU near 600k by the close.
  • Rates extended lows prior to positive but not market moving April Chicago Fed National Activity Index 0.47 vs. 0.50 est (March down-revision to 0.36 from 0.44).
  • Otherwise, no obvious headline driver or block print to explain the initial move save carry-over risk-on tone with banks leading the rally in stock indexes: (JPM and Citi +7.12%, Bank of America +6.38%).
  • Nothing new from Atlanta Fed Bostic as he commented on economic outlook: COMFORTABLE WITH 50 BPS HIKES NEXT COUPLE OF MEETINGS .. OPEN TO MOVING MORE AGGRESSIVELY IF INFLATION HIGHER, Bbg
  • Tuesday focus:
  • S&P Global US Mfg PMI (59.2, 57.7), Services PMI (55.6, 55.2) and Composite PMI (56.0, 55.7) at 0945ET; May-24 1000 Richmond Fed Mfg Index (14, 10) and New Home Sales (763k, 750k); MoM (-8.6%, -1.7%) at 1000ET.
  • Fed Chair Powell recorded open remarks eco-summit, text, no Q&A at 1220ET
  • US Tsy $47B 2Y note auction (91282CER8) at 1300ET
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Rates finished broadly weaker Monday, near session lows on deceptively robust volumes (TYM2> 1.5M, FVM2>1.4M) for an otherwise quiet session. Yield curves bear steepened with bonds leading the sell-off, 30YY comfortably above 3% at 3.0696% (+.0837) after the close. Robust futures volumes tied to increase in Jun/Sep rolls ahead May 31 First Notice w/ FVM/FVU near 600k by the close.
  • Rates extended lows prior to positive but not market moving April Chicago Fed National Activity Index 0.47 vs. 0.50 est (March down-revision to 0.36 from 0.44).
  • Otherwise, no obvious headline driver or block print to explain the initial move save carry-over risk-on tone with banks leading the rally in stock indexes: (JPM and Citi +7.12%, Bank of America +6.38%).
  • Nothing new from Atlanta Fed Bostic as he commented on economic outlook: COMFORTABLE WITH 50 BPS HIKES NEXT COUPLE OF MEETINGS .. OPEN TO MOVING MORE AGGRESSIVELY IF INFLATION HIGHER, Bbg
  • Tuesday focus:
  • S&P Global US Mfg PMI (59.2, 57.7), Services PMI (55.6, 55.2) and Composite PMI (56.0, 55.7) at 0945ET; May-24 1000 Richmond Fed Mfg Index (14, 10) and New Home Sales (763k, 750k); MoM (-8.6%, -1.7%) at 1000ET.
  • Fed Chair Powell recorded open remarks eco-summit, text, no Q&A at 1220ET
  • US Tsy $47B 2Y note auction (91282CER8) at 1300ET