Recent Lows In TY Intact Despite Pressure From UK CPI

The UK CPI-driven weakness in TYM4 failed to challenge initial support at this week’s low (108-30+), with the contract basing at 108-31+ so far. Contract last shows 109-00+, with the short-term technical trend condition remaining bullish.

• This week’s low protects more meaningful support at the 20-day EMA (108-29) and May 14 low/key support (108-15).
• Yields are 2-3bp higher across the curve, with a light flattening bias.
• The previously covered TU/FV/UXY fly block provides the most meaningful pre-NY flow, looking for an extension of the recent 5-Year richening on that structure (representing a similar trade to London flow seen in late April).
• FOMC-dated OIS shows ~40bp of cuts, sticking within the recent range.
• The minutes to the May FOMC meeting headline today’s U.S. calendar.
• This release could provide a bit more insight into how the Committee's view of the likely rate path has changed as participants sharpen their pencils for June's dot plot update.
• Our preview of that event can be found here.
• Additional Fedspeak and existing home sales data pad out the local schedule on Wednesday.