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Cheaper But Within Range Ahead Of Jobless Claims and ECB Spillover

US TSYS
Homepagemarkets-real-timeBulletMarketsFixed Income BulletsEuropean Central Bank (ECB) Market News
  • Treasuries have seen a mostly parallel shift lower today, leading EGBs and Gilts for outright declines, but remain within yesterday’s range (only just for 30s).
  • The latest extension appeared to be helped by China Plenum headlines although as noted the vast majority appear well telegraphed with CNH reflecting that.
  • Cash yields sit 2.3-3.1bps higher, with increases led by the belly. Little impetus from yesterday's 20Y re-open which came in on the screws. Today’s coupon supply is limited to 10Y TIPS.
  • Various curves consolidate yesterday’s renewed flattening away from multi-month steeps, with 2s10s at -27.6bps and 5s30s at 29bps.
  • TYU4 trades close to the earlier low of 111-05+, with the earlier decline slowed by 4.4k at 111-06+.
  • Support is seen at 110-15+ (20-day EMA) but the trend structure remains bullish with resistance at 111-13+ (Jul 16 high).
  • Ahead, markets will watch for any surprises from the ECB (seen leaving rates unchanged in a non-quarterly projection meeting before a potential cut in September) but greater focus could be on weekly jobless claims, which include initial covering a payrolls reference period. The Philly Fed manufacturing survey should also be watched after prices paid and received components stepped higher in June.
  • Data: Weekly jobless claims (0830ET), Philly Fed mfg index Jul (0830ET), Leading index Jun (1000ET), TIC flows May (0830ET)
  • Fedspeak: Goolsbee (1000ET), Logan (1345ET), Daly (1805ET), Bowman (1945ET) – see STIR bullet
  • Note/bond issuance: US Tsy $19B 10Y TIPS auction (1300ET)
  • Bill issuance: US Tsy $90B 4W, $85B 8W bill auctions (1130ET)
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  • Treasuries have seen a mostly parallel shift lower today, leading EGBs and Gilts for outright declines, but remain within yesterday’s range (only just for 30s).
  • The latest extension appeared to be helped by China Plenum headlines although as noted the vast majority appear well telegraphed with CNH reflecting that.
  • Cash yields sit 2.3-3.1bps higher, with increases led by the belly. Little impetus from yesterday's 20Y re-open which came in on the screws. Today’s coupon supply is limited to 10Y TIPS.
  • Various curves consolidate yesterday’s renewed flattening away from multi-month steeps, with 2s10s at -27.6bps and 5s30s at 29bps.
  • TYU4 trades close to the earlier low of 111-05+, with the earlier decline slowed by 4.4k at 111-06+.
  • Support is seen at 110-15+ (20-day EMA) but the trend structure remains bullish with resistance at 111-13+ (Jul 16 high).
  • Ahead, markets will watch for any surprises from the ECB (seen leaving rates unchanged in a non-quarterly projection meeting before a potential cut in September) but greater focus could be on weekly jobless claims, which include initial covering a payrolls reference period. The Philly Fed manufacturing survey should also be watched after prices paid and received components stepped higher in June.
  • Data: Weekly jobless claims (0830ET), Philly Fed mfg index Jul (0830ET), Leading index Jun (1000ET), TIC flows May (0830ET)
  • Fedspeak: Goolsbee (1000ET), Logan (1345ET), Daly (1805ET), Bowman (1945ET) – see STIR bullet
  • Note/bond issuance: US Tsy $19B 10Y TIPS auction (1300ET)
  • Bill issuance: US Tsy $90B 4W, $85B 8W bill auctions (1130ET)