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Consolidating Post-CPI Rally Ahead Of BOE, US PPI and Fedspeak

US TSYS
  • Cash Tsys has consolidated yesterday’s two step rally after both CPI and the 10Y auction despite the small tail, awaiting potential spillover from the upcoming BoE decision plus US PPI inflation and Fedspeak.
  • Fed Funds implied rates have ticked higher off yesterday's close but still just about fully price three consecutive 25bp cuts for Sep/Nov/Dec.
  • 2YY +0.0bp at 3.910%, 5YY -1.0bp at 3.374%, 10YY –0.9bp at 3.421% and 30YY -2.1bp at 3.776%.
  • TYM3 trades unchanged at 115-29 close to highs of 115-31+ on subdued volumes of 225k. A push above earlier highs could open resistance at 116-12 (May 5 high) whilst support is seen at 115-01+ (May 9 low) closely followed by the 50-day EMA of 114-28.
  • Data: PPI inflation (0830ET), weekly jobless claims (0830ET)
  • Fedspeak: Kashkari moderated discussion (0845ET), Gov Waller on financial stability/climate change (1015ET)
  • Note/bond issuance: US Tsy $21B 30Y Bond auction (912810TR9) – 1300ET
  • Bill issuance: US Tsy $35B 4W, $35B 8W bill auctions – 1130ET

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