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US TSYS: Paring Of Trump Rally But Front End Still Firmer On The Day

US TSYS
USBulletMarketsFixed Income BulletsNorth America
  • Treasuries have pared earlier gains seen on President Trump saying he’d “rather not to use” the “tremendous power” of tariffs on China, although the comments continue to have more impact at the front end of the curve.   
  • The paring has been helped by stronger than expected Eurozone PMIs, with Treasuries outperforming EGBs.
  • Cash yields are 0.1-1.7bp lower on the day with 2s and 3s leading declines.
  • The bull steepening sees 2s10s at 36.8bp (+1.1bp) and recently touched highs for the week but is within range prior to the Trump inauguration/Martin Luther King holiday on Jan 20.  
  • TYH5 has recently set session lows of 108-11 (-01) having pared an earlier climb to 108-19, amidst reasonable cumulative volumes of 375k.
  • It remains above the week’s low of 108-06 after whcih we expect firmer support at 108-00 (Jan 16 low). Gains are considered corrective with resistance seen at 109-04 (Jan 21 high).
  • Expect continued headline sensitivity today but also some focus on flash PMIs and the final U.Mich consumer survey.
  • Data: S&P Global flash PMIs Jan (0945ET), U.Mich final Jan (1000ET), Existing home sales Dec (1000ET), KC Fed services Jan (1100ET)
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  • Treasuries have pared earlier gains seen on President Trump saying he’d “rather not to use” the “tremendous power” of tariffs on China, although the comments continue to have more impact at the front end of the curve.   
  • The paring has been helped by stronger than expected Eurozone PMIs, with Treasuries outperforming EGBs.
  • Cash yields are 0.1-1.7bp lower on the day with 2s and 3s leading declines.
  • The bull steepening sees 2s10s at 36.8bp (+1.1bp) and recently touched highs for the week but is within range prior to the Trump inauguration/Martin Luther King holiday on Jan 20.  
  • TYH5 has recently set session lows of 108-11 (-01) having pared an earlier climb to 108-19, amidst reasonable cumulative volumes of 375k.
  • It remains above the week’s low of 108-06 after whcih we expect firmer support at 108-00 (Jan 16 low). Gains are considered corrective with resistance seen at 109-04 (Jan 21 high).
  • Expect continued headline sensitivity today but also some focus on flash PMIs and the final U.Mich consumer survey.
  • Data: S&P Global flash PMIs Jan (0945ET), U.Mich final Jan (1000ET), Existing home sales Dec (1000ET), KC Fed services Jan (1100ET)