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Rally Builds As US Filters In, Powell Part Two and 10Y Supply Headline

US TSYS
  • Treasuries have bull flattened overnight, with moves driven by a larger rally in EGBs with the same flattening bias and mild spillover from a dovish RBNZ.
  • Cash yields sit 1-2.5bp lower on the day, with 2s10s at -34.1bp (-1.3bps) reversing yesterday’s increase. Both 2Y and 10Y yields approach recent lows seen after Friday’s payrolls report but remain off prior March lows.
  • TYU4 has lifted to 110-18+ (+ 05+) on solid cumulative volumes of 330k. Resistance is watched at Monday’s high of 110-20+ before a more important bull trigger at 111-01 (Jun 14 high), whilst support is seen at 109-28+ (50-day EMA).
  • Today’s session should be affected by tomorrow’s CPI report looming on the horizon (preview), whilst the 10Y re-open provides interest later on (before further supply with the 30Y tomorrow). Yesterday’s 3Y stopped through by 0.6bps along with a sharp increase in the bid-to-cover.
  • Data: MBA weekly mortgage data (0700ET), Wholesale sales/inventories May/May f (1000ET)
  • Fedspeak: Powell speaks to the House committee (1000ET), Goolsbee & Bowman on childcare opening remarks (1430ET), Cook on global monetary policy (1930ET) – see STIR.
  • Note/bond issuance: US Tsy $39B 10Y Note re-open auction (1300ET)
  • Bill issuance: US Tsy $60B 17W Bill auction (1130ET)
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  • Treasuries have bull flattened overnight, with moves driven by a larger rally in EGBs with the same flattening bias and mild spillover from a dovish RBNZ.
  • Cash yields sit 1-2.5bp lower on the day, with 2s10s at -34.1bp (-1.3bps) reversing yesterday’s increase. Both 2Y and 10Y yields approach recent lows seen after Friday’s payrolls report but remain off prior March lows.
  • TYU4 has lifted to 110-18+ (+ 05+) on solid cumulative volumes of 330k. Resistance is watched at Monday’s high of 110-20+ before a more important bull trigger at 111-01 (Jun 14 high), whilst support is seen at 109-28+ (50-day EMA).
  • Today’s session should be affected by tomorrow’s CPI report looming on the horizon (preview), whilst the 10Y re-open provides interest later on (before further supply with the 30Y tomorrow). Yesterday’s 3Y stopped through by 0.6bps along with a sharp increase in the bid-to-cover.
  • Data: MBA weekly mortgage data (0700ET), Wholesale sales/inventories May/May f (1000ET)
  • Fedspeak: Powell speaks to the House committee (1000ET), Goolsbee & Bowman on childcare opening remarks (1430ET), Cook on global monetary policy (1930ET) – see STIR.
  • Note/bond issuance: US Tsy $39B 10Y Note re-open auction (1300ET)
  • Bill issuance: US Tsy $60B 17W Bill auction (1130ET)