Drift Lower In Shortened Session As Fed Minutes Come Into View

Monday trade proved characteristically quiet for a holiday (Presidents' Day) marked by a cash close in Treasuries, with futures weakening slightly throughout the session.

• As of an hour before the close, front Treasury futures were down 3 ticks at 109-21, drifting lower through the latter half of the session and remaining within tight ranges throughout (Hi 109-27, Lo 109-20) and in any case well within Friday's price parameters.
• The just-under 200k contracts traded represents around 1/6th of Friday's volumes at the same point, by comparison.
• Reminder that Globex trade concludes at 1300ET for the day, before re-opening at 1800ET preceding normal session hours Tuesday.
• Implied Fed cutting expectations remain basically unchanged on the day, with 89bp in reductions seen in FF futures through the remainder of 2024, about 1bp less than Friday's close. A first cut in June remains the centrally priced scenario.
• The data and speaker slate remains relatively thin until Wednesday afternoon when we get the minutes to the January FOMC meeting and potentially some further insight into balance sheet runoff plans. Following up on the minutes will be multiple speakers Thursday including Jefferson, Bowman, Harker, Cook, Kashkari, and Waller.
• The next major data focus this week will be Thursday's jobless claims and PMIs.