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Further Sell-Off Nears Initial Support Ahead Of Important Session

US TSYS
  • Cash Tsys are off overnight lows but still trade 2.5-4.5bp cheaper, with $ supply from Indonesia and Hungary adding to yesterday’s supply-induced pressure. 10s stopped short of testing 4% earlier with a high of 3.986%.
  • TYH4 at 112-03+ (-06+) trades close to earlier lows of 112-00. The corrective pullback has for now stopped just shy of initial technical support at 111-31+ (Dec 14 low) closely followed by 111-29+ (20-day EMA).
  • The continuation of yesterday’s cheapening pressure comes ahead of the closely watched FOMC minutes from the Dec 12-13 meeting, which could help guide market expectations around the timing of a first cut having pulled back from being fully priced for the March meeting. JOLTS and ISM mfg also provide notable data inputs.
  • Fed: Barkin ’24 voter with text (0830ET), FOMC minutes for Dec 12-13 meeting (1400ET)
  • Data: Weekly MBA mortgage data (0700ET), ISM mfg Dec (1000ET), JOLTS Nov (1000ET)
  • Bill issuance: US Tsy $56B 17W Bill auction (1130ET)

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