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Off Highs, Chairman Powell Ongoing

US TSY FUTURES
  • Treasury futures have been paring morning gains as Chairman Powell's second policy testimony to the House continues. Tsy 2s-10s at/near steady while Bonds hold mild gains.
  • Nothing really new coming from the Fed chair as he continues to strike a balanced stance that leans slightly dovish: "YOU DON'T WANT TO WAIT UNTIL INFLATION GETS ALL THE WAY TO 2% TO EASE POLICY" while "WE WANT TO HAVE GREATER CONFIDENCE, WHICH MEANS MORE GOOD INFLATION READINGS," Bbg.
  • That said -- US FI markets continue to trade soft going into the London close, followed by a rebound to hold near last Friday's highs. Sep'24 10Y futures currently steady at 110-13 vs. 110-20 high -- just off Friday's 110-20.5 high. Key short-term resistance at 111-01 - the June 14th high, remains intact for now.
  • Focus remains on Thursday's June CPI inflation data. Consensus sees core CPI at 0.2% M/M in June after the softer than expected 0.16% M/M in May (vs cons 0.3), with a mild skew toward a “high” 0.2%, per MNI’s compilation of sell-side previews.
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  • Treasury futures have been paring morning gains as Chairman Powell's second policy testimony to the House continues. Tsy 2s-10s at/near steady while Bonds hold mild gains.
  • Nothing really new coming from the Fed chair as he continues to strike a balanced stance that leans slightly dovish: "YOU DON'T WANT TO WAIT UNTIL INFLATION GETS ALL THE WAY TO 2% TO EASE POLICY" while "WE WANT TO HAVE GREATER CONFIDENCE, WHICH MEANS MORE GOOD INFLATION READINGS," Bbg.
  • That said -- US FI markets continue to trade soft going into the London close, followed by a rebound to hold near last Friday's highs. Sep'24 10Y futures currently steady at 110-13 vs. 110-20 high -- just off Friday's 110-20.5 high. Key short-term resistance at 111-01 - the June 14th high, remains intact for now.
  • Focus remains on Thursday's June CPI inflation data. Consensus sees core CPI at 0.2% M/M in June after the softer than expected 0.16% M/M in May (vs cons 0.3), with a mild skew toward a “high” 0.2%, per MNI’s compilation of sell-side previews.