MNI China Daily Summary: Tuesday, July 2

MNI BRIEF: China Aims For AI Standards By 2026

MNI China Press Digest July 2: PBOC, FDI, Land Revenue

MNI: PBOC Net Drains CNY298 Bln Via OMO Tues; Rates Unchanged

CHINA PBOC CONDUCTS CNY2 BILLION VIA 7-DAY REVERSE REPOS TUES

MNI: PBOC Sets Yuan Parity Higher At 7.1291 Tues; -0.09% Y/Y

Wider Italian Debt Dynamics Remain Concerning (2/2)

Q1 Seasonality Skews Italian Fiscal Deficit Higher (1/2)

Euro-coin Nowcast Little Changed In June

RPT-MNI: Canada Sticks To Fiscal Anchors, Spends Chunk Of Windfall

MNI BRIEF: Poilievre Calls QE 'Scam' And Would Limit BOC Remit

© 1982-2024 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

Further Steepening With More Issuance On Tap, 10YY At Pre-NFP Levels

US TSYS
Homepagemarkets-real-timeBulletMarketsFixed Income Bullets
  • Treasuries have seen a further steepening today as the long end extends a sizeable sell-off seen yesterday from a surprising rise in consumer confidence and double 2Y and 5Y auction tails.
  • Continued issuance with today’s 7Y note auction should remain a driving force, whilst data is more secondary ahead of tomorrow’s second Q1 GDP release.
  • Cash yields sit between 0.4bps lower (2s) and 1.6bps higher (30s). Having cleared 4.50% yesterday, 10Y yields are now at 4.56% off an earlier high of 4.574% and are back to pre NFP levels from May 3.
  • 2s10s sits at -39bps, with the day’s level adjustment amplified by the new 2Y benchmark. It has lifted off Friday’s low of -48.3bps for its highest since May 20/21.
  • TYM4 dipped further early in Asia hours but has since held a narrow range, at 108-04+ vs an earlier low of 108-02.
  • The contract is in retracement mode after yesterday’s clearance of a key support at 108-15 (May 14 low), opening the round 108-00 and 107-25+ (Fibo retracement of Apr 25 – May 16 rally).
  • Some notable overnight flow looking for an extension of the recent steepening: FVM4 6.0K lots blocked at 105-06.75 (suggest buyer) and TYM4 3.9K lots blocked at 108-04 (suggest seller), which we would point to a ~$240K DV01 steepener.
  • Data: MBA mortgage data May 24 (0700ET), Richmond Fed mfg May (1000ET), Dallas Fed services May (1030ET)
  • Fedspeak: Williams on community services (1345ET, no text), Beige Book (1400ET), Bostic on economy (1900ET, no text)
  • Note/bond issuance: US Tsy to sell $28bn 2Y FRN re-open, 91282CKM2 (1130ET), US Tsy to sell $44bn 7Y notes, 91282CKU4 (1300ET)
  • Bill issuance: US Tsy to sell $60bn 17-wk bills (1130ET)
274 words

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
  • Treasuries have seen a further steepening today as the long end extends a sizeable sell-off seen yesterday from a surprising rise in consumer confidence and double 2Y and 5Y auction tails.
  • Continued issuance with today’s 7Y note auction should remain a driving force, whilst data is more secondary ahead of tomorrow’s second Q1 GDP release.
  • Cash yields sit between 0.4bps lower (2s) and 1.6bps higher (30s). Having cleared 4.50% yesterday, 10Y yields are now at 4.56% off an earlier high of 4.574% and are back to pre NFP levels from May 3.
  • 2s10s sits at -39bps, with the day’s level adjustment amplified by the new 2Y benchmark. It has lifted off Friday’s low of -48.3bps for its highest since May 20/21.
  • TYM4 dipped further early in Asia hours but has since held a narrow range, at 108-04+ vs an earlier low of 108-02.
  • The contract is in retracement mode after yesterday’s clearance of a key support at 108-15 (May 14 low), opening the round 108-00 and 107-25+ (Fibo retracement of Apr 25 – May 16 rally).
  • Some notable overnight flow looking for an extension of the recent steepening: FVM4 6.0K lots blocked at 105-06.75 (suggest buyer) and TYM4 3.9K lots blocked at 108-04 (suggest seller), which we would point to a ~$240K DV01 steepener.
  • Data: MBA mortgage data May 24 (0700ET), Richmond Fed mfg May (1000ET), Dallas Fed services May (1030ET)
  • Fedspeak: Williams on community services (1345ET, no text), Beige Book (1400ET), Bostic on economy (1900ET, no text)
  • Note/bond issuance: US Tsy to sell $28bn 2Y FRN re-open, 91282CKM2 (1130ET), US Tsy to sell $44bn 7Y notes, 91282CKU4 (1300ET)
  • Bill issuance: US Tsy to sell $60bn 17-wk bills (1130ET)