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Market Roundup: Mixed PPI, Short End Remains Under Pressure​

US TSYS

Tsy futures trading mixed, curves flatter (2s10s -3.411 to -38.209) with long end see-sawing off early session lows after August PPI ex-food, energy gain 0.4% MoM, higher than anticipated 0.3%, 30YY taps 3.5403% briefly w/ futures drawing healthy buy interest on lows as data viewed as mixed on net.

  • Off lows as well -- the short end remains under pressure amid ongoing speculation of 100bp rate hike from the Fed next week while analysts predominantly expect 75bp hike.
  • Technicals for Dec 10Y currently at 115-01 (+2.5): Yesterday’s break confirmed a resumption of the current bear cycle that started Aug 2. Sights are on the key support at 114-06, the Jun 14 low. A break of this level would confirm an important technical break and highlight a resumption of the broader downtrend, exposing the 114-00 handle. Initial firm resistance is at 116-26, the Sep 2 high.
  • With PPI out of the way, focus turns to Thu's weekly claims, retail sales and import/export prices.
  • Currently, 2-Yr yield is up 2.8bps at 3.7839%, 5-Yr is up 0.7bps at 3.586%, 10-Yr is up 0bps at 3.4081%, and 30-Yr is down 0.1bps at 3.4859%.
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Tsy futures trading mixed, curves flatter (2s10s -3.411 to -38.209) with long end see-sawing off early session lows after August PPI ex-food, energy gain 0.4% MoM, higher than anticipated 0.3%, 30YY taps 3.5403% briefly w/ futures drawing healthy buy interest on lows as data viewed as mixed on net.

  • Off lows as well -- the short end remains under pressure amid ongoing speculation of 100bp rate hike from the Fed next week while analysts predominantly expect 75bp hike.
  • Technicals for Dec 10Y currently at 115-01 (+2.5): Yesterday’s break confirmed a resumption of the current bear cycle that started Aug 2. Sights are on the key support at 114-06, the Jun 14 low. A break of this level would confirm an important technical break and highlight a resumption of the broader downtrend, exposing the 114-00 handle. Initial firm resistance is at 116-26, the Sep 2 high.
  • With PPI out of the way, focus turns to Thu's weekly claims, retail sales and import/export prices.
  • Currently, 2-Yr yield is up 2.8bps at 3.7839%, 5-Yr is up 0.7bps at 3.586%, 10-Yr is up 0bps at 3.4081%, and 30-Yr is down 0.1bps at 3.4859%.