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FOMC Day, Qtrly Refunding and Solid Data Docket

US TSYS
  • Cash Tsys sitting modestly richer on the day after little reaction to a much anticipated EZ CPI that saw a sizeable miss at a headline level but one tenth beat for core. Various important releases today include ADP, ISM mfg and JOLTS, but initial market reaction will firmly be with the FOMC in mind. Whilst highly unlikely to impact today’s decision, they could help further shape expectations on the likelihood of a second 25bp hike in March.
  • Treasury yields approach the meeting with benchmarks broadly in the middle of last month’s range: 2YY -0.2bps, 5YY -1.4bps at 3.603%, 10YY -2.0bps at 3.486% and 30YY -2.1bps at 3.612%.
  • TYH3 trades 8+ ticks higher at 114-25, off a session high of 114-30 that forms initial resistance. Above that sits 115-13 (Jan 25 high) whilst support is at 114-05+ (Jan 30 low) with a sterner test at the 50-day EMA of 114-00+.
  • FOMC: Announcement 1400ET, press conference 1430ET.
  • Data: ADP Jan (0815ET), final US PMI Jan (0945ET), ISM mfg Jan (1000ET), JOLTS Dec (1000ET), Construction spending Dec (1000ET) plus weekly MBA mortgage data (0700ET).
  • Treasury Quarterly Refunding report – 0830ET. Preview here.
  • Bill issuance: US Tsy $36B 17W bill auction – 1130ET
  • Earnings: A lighter day for reporting before it picks up again tomorrow including Apple, Alphabet and Amazon.

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