Market Roundup: Off Pre-Data Lows, Early Risk-Off Support

Fairly skittish moves as Tsy futures recover from pre-data lows (following multiple block sales in 5s and 10s ahead the NY open), trading steady/mixed in the last few minutes, extending session highs.

• Trading desks noted moderate two-way just after the data: Housing Starts is 1724k, -0.2% MoM; April Building Permits -3.2% MoM, for annualized rate of 1819k units. Starts were exp to be 1756k units, or -2.1% MoM, Permits est 1814k units.
• Follow-through bid not data associated w/ sympathy move with Gilts rallying. Likely adding to bid: risk-off support as equities extend early session lows (SPX emini ESM2 -68.0 at 4016.75)
• Countervailing flows in futures ahead Fri's June option expiration and the June/Sep rolling that is starting to ramp up (though roll volumes still modest).
• Not much of a reaction to unscheduled Fed speak: Chicago Fed Evans "SEES 50 BPS RATE HIKE NEXT MEETING, PROBABLY THEREAFTER .. VERY USEFUL TO FRONT-LOAD OUR POLICY SETTINGS" Bbg, Eurodollar Whites (EDM2-EDH3) outperforming +0.010-0.025. Later in the afternoon: Philly Fed Harker economic outlook, text and Q&A at 1600ET.
• US 10Y technicals with TYM2 currently trading 118-29.5 (+2): 10s remain below the recent high of 120-00+ on May 12. The trend direction remains down and recent short-term gains are considered corrective - a pause in the downtrend.
• Any resumption of gains would open 120-18+, the Apr 27 high. This level represents an important short-term resistance where a break would signal scope for a stronger retracement. Key support and the bear trigger is unchanged at 117-08+.