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MNI ASIA MARKETS ANALYSIS: Better Than Expected ADP Jobs Gain

  • HIGHLIGHTS
    Treasuries look to finish weaker but well off early session lows after larger than expected ADP private job gains were reported.
    Little reaction to Richmond Fed President Barkin comments on dialing back restraint as inflation and unemployment near normal levels, but cautioned not to declare a victory on inflation.
  • Treasury curves bear steepened, 2s10s tapped 16.691 high compared to Monday's 7.819 low, while projected rate cut pricing stabilizes around -70bp by December.
  • Focus turns to Weekly Claims, Factory/Durable Goods Orders and ISM Services on Thursday, followed by Friday's headline Non-Farm Payrolls for September.


US TSYS

US TSYS: Late Session Sell Pressure

  • Treasuries and SOFR futures come under renewed selling in the last few minutes, still well off midmorning lows, however. Dec'24 10Y futures trade 114-14 last (-8) vs 114-07 low -- which happens to be the initial technical support (Sep 26 low) followed by 114-00.5 (Sep 4 low).
  • Curves remain steeper (2s10s +2.063 at 14.375) but scaling back support amid some chunky selling in SOFR 1- and 3M futures: appr -15,000 SERX4 at 95.41, and 23,000 SFRZ4 at 95.975.
  • SOFR White pack (SFRZ4-SFRU5) currently -0.010-0.025, while projected rate cuts continue to back off this morning's levels (*): Nov'24 cumulative -33.8bp (-34.4bp), Dec'24 -69.9bp (-70.5bp), Jan'25 -100.4bp (-101.9bp).
  • Focus turns to Weekly Claims, Factory/Durable Goods Orders and ISM Services on Thursday, followed by Friday's headline Non-Farm Payrolls for September.

SOFR FIXES AND PRIOR SESSION REFERENCE RATES
​​​​​​
SOFR Benchmark Settlements:

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  • HIGHLIGHTS
    Treasuries look to finish weaker but well off early session lows after larger than expected ADP private job gains were reported.
    Little reaction to Richmond Fed President Barkin comments on dialing back restraint as inflation and unemployment near normal levels, but cautioned not to declare a victory on inflation.
  • Treasury curves bear steepened, 2s10s tapped 16.691 high compared to Monday's 7.819 low, while projected rate cut pricing stabilizes around -70bp by December.
  • Focus turns to Weekly Claims, Factory/Durable Goods Orders and ISM Services on Thursday, followed by Friday's headline Non-Farm Payrolls for September.


US TSYS

US TSYS: Late Session Sell Pressure

  • Treasuries and SOFR futures come under renewed selling in the last few minutes, still well off midmorning lows, however. Dec'24 10Y futures trade 114-14 last (-8) vs 114-07 low -- which happens to be the initial technical support (Sep 26 low) followed by 114-00.5 (Sep 4 low).
  • Curves remain steeper (2s10s +2.063 at 14.375) but scaling back support amid some chunky selling in SOFR 1- and 3M futures: appr -15,000 SERX4 at 95.41, and 23,000 SFRZ4 at 95.975.
  • SOFR White pack (SFRZ4-SFRU5) currently -0.010-0.025, while projected rate cuts continue to back off this morning's levels (*): Nov'24 cumulative -33.8bp (-34.4bp), Dec'24 -69.9bp (-70.5bp), Jan'25 -100.4bp (-101.9bp).
  • Focus turns to Weekly Claims, Factory/Durable Goods Orders and ISM Services on Thursday, followed by Friday's headline Non-Farm Payrolls for September.

SOFR FIXES AND PRIOR SESSION REFERENCE RATES
​​​​​​
SOFR Benchmark Settlements:

Keep reading...Show less