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Near Late Session Highs Ahead Thu's Weekly Claims, Existing Home Sales

US TSYS
  • Treasuries marched off early session lows Wednesday, following EGBs lead despite pickup in inflation metrics. Jun'24 10Y marked 108-08 session high well after futures rallied following the second consecutive stop for the 20Y auction reopen: 4.818% high yield vs. 4.840%.
  • Limited economic data, US mortgage applications rose despite higher rates: seasonally adjusted 3.3% last week after a flag week prior.
  • Fed Beige Book: overall economic activity expanded slightly on balance since late February. Ten out of twelve Districts experienced either slight or modest economic growth—up from eight in the previous report, while the other two reported no changes in activity.
  • Short end rates lagged the rally while Projected rate cut pricing steady vs. late Tuesday levels: May 2024 steady at -2.6% w/ cumulative -0.6bp at 5.322%; June 2024 steady at -16.2% w/ cumulative rate cut -4.7bp at 5.282%. July'24 cumulative at -12.6bp, Sep'24 cumulative -24.9bp.
  • Thursday Data Calendar: Weekly Claims, Exist Home Sales, Fed Speak from Fed Gov Bowman, NY Fed Williams, Atlanta Fed Bostic and Boston Fed Collins.

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