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Market Roundup: Post-CPI Relief Rally, But Wait - There's More (Data)

US TSYS

Tsys surge after July CPI read of 0.0%, Core 0.3%; Y/Y 8.5%, Core Y/Y 5.9%. Relief rally across the board while yield curves bull steepen as Sep rate hike expectations snap from strong 75bp conviction to 50bp (off immediate high of 96.76, Sep Eurodollar futures trading 96.655 +0.100).

  • Not a turning point, however, as markets still have a lot of data to absorb between now and September 16.
  • Technicals for TYU2 currently trading 120-10 (+26.5) - The trend direction is unchanged and remains up. Contract trading well above support at the 50-day EMA now, which intersects at 119-07+. There is also a trendline support at 119-11+. A break of this zone would threaten the uptrend. A reversal higher would refocus attention on the bull trigger at 122-02.
  • Cross asset update: Stocks surged post-data (SPX eminis at 4195.5 +71.00); Spot Gold firmer +6.76 at 1801.05; Crude firmer (WTI +0.36 at 90.86).
  • Data on tap for Thursday: PPI Final Demand MoM (0.3% est vs. 1.1% prior), weekly claims (265k est vs. 260k prior), continuing claims (1.45M vs. 1.416M prior).
  • Currently, 2-Yr yield is down 13.8bps at 3.1315%, 5-Yr is down 10.2bps at 2.8585%, 10-Yr is down 6.4bps at 2.7134%, and 30-Yr is down 3.2bps at 2.9574%.
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Tsys surge after July CPI read of 0.0%, Core 0.3%; Y/Y 8.5%, Core Y/Y 5.9%. Relief rally across the board while yield curves bull steepen as Sep rate hike expectations snap from strong 75bp conviction to 50bp (off immediate high of 96.76, Sep Eurodollar futures trading 96.655 +0.100).

  • Not a turning point, however, as markets still have a lot of data to absorb between now and September 16.
  • Technicals for TYU2 currently trading 120-10 (+26.5) - The trend direction is unchanged and remains up. Contract trading well above support at the 50-day EMA now, which intersects at 119-07+. There is also a trendline support at 119-11+. A break of this zone would threaten the uptrend. A reversal higher would refocus attention on the bull trigger at 122-02.
  • Cross asset update: Stocks surged post-data (SPX eminis at 4195.5 +71.00); Spot Gold firmer +6.76 at 1801.05; Crude firmer (WTI +0.36 at 90.86).
  • Data on tap for Thursday: PPI Final Demand MoM (0.3% est vs. 1.1% prior), weekly claims (265k est vs. 260k prior), continuing claims (1.45M vs. 1.416M prior).
  • Currently, 2-Yr yield is down 13.8bps at 3.1315%, 5-Yr is down 10.2bps at 2.8585%, 10-Yr is down 6.4bps at 2.7134%, and 30-Yr is down 3.2bps at 2.9574%.