Market Roundup: UofM 5-10Y Inflation Dip, July'21Low

UofM preliminary Sept print confirming the larger than expected bounce into Aug. Current conditions small miss, expectations small beat. 1Y inflation expectations as expected, down 20bps to 4.6% for lowest since Sep'21.

• Meanwhile 5-10Y inflation surprisingly dips a tenth to 2.8%, lowest since Jul'21, after two months at 2.9% as it continues to slowly move lower from the June 3.1% peak, but within the range of recent revisions come the final print.
• No obvious headline driver for move to early session low (30YY taps 3.5459% high) in early trade while SPX ratcheted lower as well, ESZ2 marking 3855.25 low by midmorning.
• Trading desks posited large steepener/curve flattener unwinds in play, boosting early volumes. Tsys 2s10s bounces off lowest/inverted levels since mid-August: -47.406 to -44.487, while 5s30s bear steepened to -18.665 high from -22.574 low.
• Technicals for Dec 10Y futures currently at 114-23 (+7): Treasuries remain soft and the contract has traded lower once, confirming a resumption of the trend 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.
• Current cross-asset levels: Stocks weaker, SPX extending lows w/ESZ2 at 3866.50 (-40.25), Crude firmer (WTI +0.83 at 85.93) as is Gold (1674.78 +9.59).