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Near Lows, Flash PMIs Sapped Early Risk-On Tone

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  • Treasury futures remain weaker after the bell but off midmorning lows after higher than expected flash PMIs: Services PMI (54.8 vs. 51.2 est) and Composite PMI (54.4 vs. 51.2 est) while Manufacturing PMI slightly higher (50.9 vs. 49.9 est).
  • The flash data had sapped the early risk-on tone with S&P Eminis and Nasdaq indexes marking new all-time highs before extending lows amid several rounds of program selling/profit taking ahead of the extended Memorial holiday weekend.
  • Not a big reaction, Treasury futures did recede after lower than expected weekly claims at 215k vs. 220k est, prior revised to 223k from 222k. Continuing claims near in-line at 1.794M vs. 1.793M est, prior down-revised to 1.786M from 1.794M.
  • Rate cut projections have receded vs late Wednesday levels (*): June 2024 at -0% w/ cumulative rate cut 0.0bp at 5.328%, July'24 at -10.0% (-16.0%) w/ cumulative at -2.5bp (-5.2bp) at 5.302%, Sep'24 cumulative -14.2bp (-17.8bp), Nov'24 cumulative -21.2bp (-26.2bp), Dec'24 -34.8bp (-40.6bp).
  • Look ahead to Friday's data calendar: focus on Durables/Cap Goods and the latest UofM Sentiment. June Treasury options expire tomorrow as well.
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  • Treasury futures remain weaker after the bell but off midmorning lows after higher than expected flash PMIs: Services PMI (54.8 vs. 51.2 est) and Composite PMI (54.4 vs. 51.2 est) while Manufacturing PMI slightly higher (50.9 vs. 49.9 est).
  • The flash data had sapped the early risk-on tone with S&P Eminis and Nasdaq indexes marking new all-time highs before extending lows amid several rounds of program selling/profit taking ahead of the extended Memorial holiday weekend.
  • Not a big reaction, Treasury futures did recede after lower than expected weekly claims at 215k vs. 220k est, prior revised to 223k from 222k. Continuing claims near in-line at 1.794M vs. 1.793M est, prior down-revised to 1.786M from 1.794M.
  • Rate cut projections have receded vs late Wednesday levels (*): June 2024 at -0% w/ cumulative rate cut 0.0bp at 5.328%, July'24 at -10.0% (-16.0%) w/ cumulative at -2.5bp (-5.2bp) at 5.302%, Sep'24 cumulative -14.2bp (-17.8bp), Nov'24 cumulative -21.2bp (-26.2bp), Dec'24 -34.8bp (-40.6bp).
  • Look ahead to Friday's data calendar: focus on Durables/Cap Goods and the latest UofM Sentiment. June Treasury options expire tomorrow as well.