Market Roundup: Broad Range on Bond Reversal

Wide range for rates Wednesday, 30Y Bonds extending session lows ahead of midday after blowing past early overnight highs after the NY open. Wide ranges as rates react to positive (non-recessionary) data, as 30YY fell below 3.0% briefly to 2.9926% low and have climbed steadily ever since to 3.1223% high.

• Underlying rate futures started to sell-off prior to final June services PMI (52.7 (FLSH 51.6; MAY 53.4), accelerated the sell-off after ISM June services composite Index came in stronger than expected as it only dipped to 55.3 (cons 54.0) from 55.9, contrary to the large miss in last week's manufacturing index, building on the upward revision seen in the final PMI just earlier.
• Technicals for TYU2: Weaker Tsys a minor slowing of the recent bullish short-term cycle. A bullish theme remains in play following last week’s gains and resumption of the uptrend that started Jun 14.
• Price is also through the 50-day EMA. This signals scope for a continuation higher and attention is on 120-19+, the May 26 high. Key short-term support has been defined at 116-11, Jun 28 low. A break would highlight a bearish reversal.
• Focus turns to FOMC minutes for June meeting at 1400ET with the usual caveat that developments since the meeting may render the minutes "stale" - this time around, since the 75bp June increase, those developments include rising recession fears and a sharp repricing lower in rate hike expectations.