MNI BRIEF:BOJ Q1 Output Gap Hits 16th Negative Reading In Row

MNI: PBOC Sets Yuan Parity Higher At 7.1312 Weds; -0.34% Y/Y

MNI: PBOC Net Drains CNY248 Bln Via OMO Weds; Rates Unchanged

CHINA PBOC CONDUCTS CNY2 BILLION VIA 7-DAY REVERSE REPOS WEDS

CHINA SETS YUAN CENTRAL PARITY AT 7.1312 WEDS VS 7.1291

MNI BRIEF: 'Noise' Driving Economic Deterioration- Campos Neto

Australia May Total Dwelling Approved +5.5%

Australia May Retail Trade +0.6%

MNI: AUSTRALIA MAY RETAIL SALES +0.6% M/M

RPT-MNI: Canada Sticks To Fiscal Anchors, Spends Chunk Of Windfall

MNI BRIEF: Poilievre Calls QE 'Scam' And Would Limit BOC Remit

© 1982-2024 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

Sizeable Bear Steepening Amidst Consumer Confidence Beat and Heavy Supply

US TSYS
Homepagemarkets-real-timeBulletMarketsFixed Income Bullets
  • Treasuries have seen a sizeable bear steepening today, driven by stronger than expected Conference Board consumer confidence (despite a weak labor differential) and then more notably sizeable tails for double 2Y and 5Y auctions with their particularly low bid-to-cover metrics (lowest since Nov’21 and Feb’21 respectively).
  • Kashkari (non-voter) earlier saying he doesn’t think anyone has taken rate increases off the table, albeit with him seeing quite low odds of a hike, had little immediate impact. Similarly, WTI gains of 3.2% have done little to stop the steepening on the day.
  • Cash yields sit between +2.4bp (2s) and +8.6bps (30s) on the day, with 2s10s at -43bps for a firm lift from Friday’s YtD low of -48.3bps.
  • 10Y yields have easily cleared 4.50% and hold around 4.54% for now, at highs since the May 3 payrolls report.
  • 2Y yields meanwhile at 4.972% have already cleared pre-payrolls levels but could see more resistance to hit 5% having last briefly breached that handle on Apr 30 for one day before the FOMC May 1 announcement.
  • TYM4 cleared a key support at 108-15 (May 14 low) with the 5Y auction before hitting a low of 108-08. Next support is seen at 108-06 (May 3 low) after which lies 108-06 (May 2 low).
  • Fed Funds implied rates have lifted to show just 19bp of cumulative cuts priced for Nov and 32bp for Dec.
  • Tomorrow sees the Beige Book but greater focus is likely on continued supply with $44bn of 7Y supply on the docket after a combined $139bn over 2Y and 5Y notes today.
  • Data focus lies on second estimates of Q1 national accounts Thu before the April PCE report on Fri.
277 words

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
  • Treasuries have seen a sizeable bear steepening today, driven by stronger than expected Conference Board consumer confidence (despite a weak labor differential) and then more notably sizeable tails for double 2Y and 5Y auctions with their particularly low bid-to-cover metrics (lowest since Nov’21 and Feb’21 respectively).
  • Kashkari (non-voter) earlier saying he doesn’t think anyone has taken rate increases off the table, albeit with him seeing quite low odds of a hike, had little immediate impact. Similarly, WTI gains of 3.2% have done little to stop the steepening on the day.
  • Cash yields sit between +2.4bp (2s) and +8.6bps (30s) on the day, with 2s10s at -43bps for a firm lift from Friday’s YtD low of -48.3bps.
  • 10Y yields have easily cleared 4.50% and hold around 4.54% for now, at highs since the May 3 payrolls report.
  • 2Y yields meanwhile at 4.972% have already cleared pre-payrolls levels but could see more resistance to hit 5% having last briefly breached that handle on Apr 30 for one day before the FOMC May 1 announcement.
  • TYM4 cleared a key support at 108-15 (May 14 low) with the 5Y auction before hitting a low of 108-08. Next support is seen at 108-06 (May 3 low) after which lies 108-06 (May 2 low).
  • Fed Funds implied rates have lifted to show just 19bp of cumulative cuts priced for Nov and 32bp for Dec.
  • Tomorrow sees the Beige Book but greater focus is likely on continued supply with $44bn of 7Y supply on the docket after a combined $139bn over 2Y and 5Y notes today.
  • Data focus lies on second estimates of Q1 national accounts Thu before the April PCE report on Fri.