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Modest Twist Flattening Ahead Of ECB, Powell

  • Cash Tsys sit with a mild twist flattening (with only 2s slight cheaper) as they take stock ahead of the upcoming ECB decision and then Powell’s participation at a Monetary Policy Conference. A series of swings since Friday’s payrolls on fluctuating inflation and growth pressures has seen 2Y yields range from 3.38-3.515% over that period, with the current 3.43% at the lower end after yesterday’s latest rally as oil slid on softer demand fears.
  • 2YY +0.4bps at 3.435%, 5YY -2.2bps at 3.336%, 10YY -2.5bps at 3.239%, 30YY -1.8bps at 3.393%.
  • TYZ2 trades 6 ticks higher at 116-11+ although remains vulnerable to the downside from a technical perspective having breached the bear trigger at 115-23, with support seen at 115-13+ (Sep 7 low). To the upside, initial firm resistance is eyed at 116-26 (Sep 2 high).
  • Fedspeak: Powell takes part in moderated Q&A (0910ET), followed by Evans (’23) and Kashkari (’23) later on.
  • Data: Consumer credit late on plus weekly jobless claims outside of a payrolls reference week.
  • Bill issuance: $50B 4-W and $45B 8-W bill auctions (1130ET).

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