Slightly Firmer After Month End Selling

TYH4 is currently trading at 110-29+, +0-04 from NY closing levels.

• TYH4 at 109-29+ sits off the yesterday’s low of 109-22. Nevertheless, it represents a sizeable retracement off yesterday’s high of 110-15+ and dents the potential for an extension of the recent bullish theme. However, it doesn’t yet trouble support at 109-05+ (Nov 28 low), according to MNI’s technicals team.
• There was a deluge of US data on Thursday, none of which promoted an extension of the recent large rally. Core PCE was close to expected at 0.16% m/m, while US initial jobless claims printed in line with expectations at 218k. The MNI Chicago PMI was, however, much stronger than expected.
• Cash tsys finished 4-7bps cheaper, with the 10-year leading. The US tsy 10-year yield rose 7bps to 4.33% but is still down 65bps from the cycle high of 5.01%.
• The FOMC has reached its terminal rate, according to Fed funds futures and rate cuts are the next action. While a cut is still fully priced for May, Fedspeak overnight pushed back against the market's dovish policy outlook. Fed Daly said that she is not thinking about rate cuts, and it is too early to call an end to hikes. Fed Williams noted that monetary conditions are restrictive but should remain so for some time to bring inflation back to 2%.