Slightly Stronger After Modest Gains On Tuesday

TYH4 is trading at 111-31+, +0-02+ from NY closing levels.

• This comes after US tsys showed a modest rally on Tuesday. US tsys finished the NY session with yields 1-2bps lower across benchmarks ahead of CPI/PPI data on Thursday/Friday.
• A better-than-feared 3-year auction provided support late in the session. The US tsy 10-year finished 2bps lower at 4.01%. Nevertheless, it was the third straight close above 4%.
• The current level for TYH4 remains well inside technicals, according to MNI’s technicals team. TYH4 is in a short-term corrective cycle. Price has traded through the 20-day EMA and the breach of this average, does suggest the potential for a continuation lower near-term. The next key support lies at 110-25+, the 50-day EMA. Moving average studies continue to suggest the medium-term trend direction is up. A recovery would refocus attention on the bull trigger at 113-12, the Dec 27 high.