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Post-UofM React: Tsys Making Session Highs

US TSYS
  • Treasury futures are trading mildly higher now in the minutes after the latest UofM data came out near steady to lower than expected (current Conditions 64.1 vs. 66.0 - the lowest since late 2022) while inflation expectations come out in-line to slightly lower than expected with both 1Y and 5-10Y at 2.9%.
  • Tsys are revisiting early session highs as futures recovered from the initial PPI-tied sell-off where Sep 10y futures traded down to 110-25.5 low, are currently at 111-06.5 (+1.5) as economists deemed the data as more mixed than the initial hawkish reaction warranted.
  • Curves are bull steepening with 2s10s +2.103a t -28.604, 5s30s +1.991 at 29.556.
  • Initial technical resistance is at 111-10+ (High Jul 8) followed by 111-13 (High Mar 25). Clearance of this hurdle would open 111-31, a Fibonacci projection.

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