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Extending Lows after Brief Bounce

US TSY FUTURES
  • Treasury futures are trading weaker, breaking through the low end of a narrow overnight range ahead the NY open. Tsy Sep'24 10Y futures currently -12.5 at 110-26.5 low after brief bounce to 110-30.5. Initial technical support at 110-15+ (20-day EMA) followed by 110-03 (50-day EMA) values.
  • No obvious headline driver for the break lower, but rebound is classic for thin summer markets on a Friday with no data and a couple Fed speakers: 1040 NY Fed Williams monetary policy panel discussion at 1040ET, Atlanta Fed Bostic closing remarks at 1300ET.
  • That said, while market depth may be thin, current volumes are anything but: TYU4 over 710k already. Volumes surged on the back of news that cloud software provider CrowdStrike was having outages that affect Microsoft systems around the globe overnight. Headlines of workaround solutions having been filtering through the last couple hours.
  • Of course, speculation over whether President Biden will pull out of his run for a second term continue. Opinions vary over how FI markets will react if Biden pulls out, from no reaction at all to a surge in yields depending on who fills the void. Debate over curve moves ongoing as markets game out rate cuts, tariffs, deportations, etc.

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