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Off Highs/Narrow Range Since Weak Data, More Housing Tue

US TSYS

Tsy futures trade higher after the bell, holding to narrow range since scaling back from midmorning high soon after the NAHB Housing data miss, yield curves holding mildly steeper. Tsy 30YY fell to low of 3.0503%, running at 3.098% at the moment

  • Low volume session w/ TYU2 just over 840k vs 640k at late morning after Tsys extended early highs after the NY Fed Empire State index gapped -31.5 vs. 5.0 estimate - "with sharp declines in orders and shipments" for the second largest monthly decline since May 2020; August read of NAHB Housing Market Index is 49 vs. 54 est.
  • Moderate option-tied and supply related hedging contributed to two-way flow on the session Tsys bill sales include $54B 13W and $42B 26W up shortly, high-grade corporate issuance resumed: $3B Amgen 3pt, $2.25B Rabobank 3pt launched while $3B KFW 2Y SOFR was rolled to Tuesday.
  • Starting to see the start of Sep/Dec Tsy futures rolling ahead Aug 31 first notice when Dec takes lead quarterly position, roll volumes still muted.
  • Data on tap for Tuesday (est, prior): Building Permits (1.696M rev, 1.640M), MoM (0.1% rev, -3.3%), Housing Starts (1.559M, 1.528M), MoM (-2.0%, -2.0%), Industrial Production MoM (-0.2%, 0.3%), Capacity Utilization (80.0%, 80.2%) and Mfg Production (-0.5%, 0.4%).
  • The 2-Yr yield is down 4.6bps at 3.1967%, 5-Yr is down 4.6bps at 2.91%, 10-Yr is down 4.3bps at 2.7878%, and 30-Yr is down 1.1bps at 3.0972%.
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Tsy futures trade higher after the bell, holding to narrow range since scaling back from midmorning high soon after the NAHB Housing data miss, yield curves holding mildly steeper. Tsy 30YY fell to low of 3.0503%, running at 3.098% at the moment

  • Low volume session w/ TYU2 just over 840k vs 640k at late morning after Tsys extended early highs after the NY Fed Empire State index gapped -31.5 vs. 5.0 estimate - "with sharp declines in orders and shipments" for the second largest monthly decline since May 2020; August read of NAHB Housing Market Index is 49 vs. 54 est.
  • Moderate option-tied and supply related hedging contributed to two-way flow on the session Tsys bill sales include $54B 13W and $42B 26W up shortly, high-grade corporate issuance resumed: $3B Amgen 3pt, $2.25B Rabobank 3pt launched while $3B KFW 2Y SOFR was rolled to Tuesday.
  • Starting to see the start of Sep/Dec Tsy futures rolling ahead Aug 31 first notice when Dec takes lead quarterly position, roll volumes still muted.
  • Data on tap for Tuesday (est, prior): Building Permits (1.696M rev, 1.640M), MoM (0.1% rev, -3.3%), Housing Starts (1.559M, 1.528M), MoM (-2.0%, -2.0%), Industrial Production MoM (-0.2%, 0.3%), Capacity Utilization (80.0%, 80.2%) and Mfg Production (-0.5%, 0.4%).
  • The 2-Yr yield is down 4.6bps at 3.1967%, 5-Yr is down 4.6bps at 2.91%, 10-Yr is down 4.3bps at 2.7878%, and 30-Yr is down 1.1bps at 3.0972%.