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Long-End Leads Treasuries Firmer, PCE In An Hour

US TSYS
  • Longer-dated Tsys have firmed recently to new session highs, pitching to a modest bull flattening with 2s10s at -47bps (-1.5bp).
  • TYH4 nudges to a new session high of 112-30+, nearer initial resistance at yesterday’s 113-04+ after which lies 113-12+ (Fibo projection of Oct-Nov price swing). Volumes still only 175k.
  • Today’s docket is heavily data-focused, led by the monthly PCE report for Nov at 0830ET after yesterday’s Q3 data saw core PCE inflation revised down sharply from 2.3% to 2.0% annualized in the third reading. Recall Chair Powell saw it at 3.1% Y/Y in Nov and the median FOMC participant looks for 3.2% in 4Q23.

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