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AUDUSD TECHS

Bearish Focus

MONTH-END EXTENSIONS

Updated Barclays/Bbg Extension Estimates for US

US TSYS

Late Session Selling

EURJPY TECHS

Consolidation Mode

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Tsys have faded nascent gains made in Asia-Pac trade and are slightly lower on the session, but remain well within Wednesday's ranges as we gear up for the ECB decision, 30-Yr supply, and of course, the latest read on inflation.

  • Long end underperforming, with supply ahead. The 2-Yr yield is up 0.2bps at 0.1568%, 5-Yr is up 1bps at 0.7596%, 10-Yr is up 0.8bps at 1.4992%, and 30-Yr is up 1.1bps at 2.1795%.
  • Sep 10-Yr futures (TY) down 3.5/32 at 132-21 (L: 132-20 / H: 132-27.0).
  • The ECB decision at 0745ET and press conference at 0830ET in focus early.
  • But May CPI the clear focal point of the session at 0830ET, following April's huge upside beat. Price pressures seen decelerating M/M vs April but accelerating Y/Y on base effects.
  • We also get jobless claims at 0830ET. Rounding out data are Q1 household net worth (1700ET) and monthly budget statement (1900ET).
  • Supply is highlighted by $24B 30Y Bond re-opening at 1300ET, with $80B combined in 4-/8-wk auctions at 1130ET. NY Fed buys ~$6.025B of 4.5-7Y Tsys.