Pressured, 10s Near 4.60%

The unwind of some of Friday’s geopolitical risk premium has dominated thus far, a topic that has been covered in detail elsewhere,

• As noted previously, TYM4 has breached its pre-London low.
• The contract operates in a 108-06 to 108-22 range, with initial support not seen until the Apr 11 low (107-27+).
• Volume in the contract runs at an elevated ~406K.
• Cash yields are 3.5-4.5bp higher across the curve.
• 10s move closer to 4.60%, last 4.59%
• Retail sales data dominates the NY calendar today, with the Empire manufacturing survey and NAHB housing data also due.
• Comments from Fed’s Logan were not market moving, focusing on the gender gap in the labour market. NY Fed President Williams is due to speak later today, although it is Tuesday’s appearance from Chair Powell (in a moderated Q&A) that is set to generate the most interest this week.
• FOMC-dated OIS prices the first 25bp cut come the end of the Sep FOMC, with ~43bp of cuts priced through year end.
• Those levels are off post-CPI extremes, but still represent a significantly shallower cutting cycle vs. levels seen one week ago.