Free Trial

Market Roundup: Geopol Headline Sensitivity Resumes

US TSYS
Continued bounce off Wed's post FOMC lows: Tsy futures holding moderately higher levels across the board at midmorning, off recent session lows but well off late overnight highs (30YY currently running at 2.4164% -.0363 after tapping 2.5358% high after FOMC 25bp liftoff Wed.
  • Inflation risk remains to the upside, while Russia war in Ukraine, and rising COVID rates continue to underpin uncertainty over forward pricing: introducing curve inversion as markets start estimating rate hikes around late 2023/early 2024 (Sep23 Eurodlr futures trading under Dec23 futures; Tsy 5s10s curve inverted yesterday/today is just about steady at .396 +.617 (-1.638 low).
  • Muted react to earlier data: weekly claims lower than exp at 214k (220k est), as were continuing claims at 1.419M (1.480M est); better housing starts 1.769M (1.7M est), permits little weaker at 1.859M 1.899M est); IP +0.5%; CapU 77.6%.
  • Note: fast two-way trade after BoE hiked 25bp to .75% but softened the move with gentler policy guidance and larger infl undershoot.
  • Geopol headline sensitivity resumes: markets see-sawing on any hint of progress or lack thereof re: Russia/Ukraine peace talks. Knock-on effect: West Texas Crude (WTI) gaining again +$7.33 (7.71%) at $102.41; Gold +$22.33 (1.16%) at $1949.77. Stocks only mildly weaker: SPX emini -7 (-0.16%) at 4341.75
  • Technicals: Treasuries maintain this week’s bearish theme despite a recovery from Wed’s low of 123-25+. Monday’s strong sell-off resulted in a break of key support at 125-14+, the Feb 10 low and a bear trigger. This has confirmed a resumption of the primary downtrend and marks an extension of the bearish price sequence of lower lows and lower highs. The focus is on 123-19 next. Initial firm resistance is seen at 126-10+, the 20-day EMA.

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.