February 25, 2025 11:53 GMT
US TSYS: Bunds Lend Added Support to Tsys, Trade Uncertainty Spreads
US TSYS
- Treasuries resume climb to highest levels since mid December overnight, gaining additional support in early London trade as Bunds rallied. Bunds reversed weakness to extending highs as Pres Trump trade policy continues to unsettle rates, weigh on equities.
- Currently, Mar'25 10Y futures trades +11.5 at 110-07.5 vs. 110-09 high, focus on initial technical resistance at 110-19 (76.4% retracement of the Dec 6 - Jan 13 bear leg) followed by 110-25 (High Dec 12 ‘24). Initial firm support to monitor is 109-09, the 50-day EMA. A move below this average is required to highlight a potential reversal.
- Tsy 10Y yield has slipped to 4.3328% low (-.0675), curves mixed: 2s10s -.581 at 21.769, 5s30s +1.618 at 43.424. Heavy futures volume (TUH5 1.5M already) tied to Mar/Jun roll with latter taking lead quarterly this Friday.
- Bbg US$ index inching lower (BBDXY -0.46 to 1286.81) paring overnight gains after Pres Trump mention of Canada & Mexico tariffs are "on time, moving forward" late Monday.
- Projected rate cuts through mid-2025 steady to firmer vs. lat eMonday levels (*) as follows: Mar'25 at -0.7bp (-0.5bp), May'25 at -8.2bp (-7.1bp), Jun'25 at -20.7bp (-18bp), Jul'25 at -28.6bp (-25.6bp).
- Focus on regional Fed data (Philly, Richmond, Dallas) & Fed speakers today, House price index at 0900ET, Consumer Confidence at 1000ET. US Treasury auctions $75B 6W Bills at 1130ET, $70B 5Y Notes (91282CMQ1) at 1300ET.
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