Slightly Weaker After A Heavy NY Session

TYU3 is trading at 110-23, -04+ from NY closing levels.

• Cash tsys finished 4-10bp cheaper, near session lows, after erasing gains following a relatively benign CPI report (core m/m 0.16% vs. 0.2% est) and a jump in jobless claims (248k versus 230k est. and 227k prior).
• Yields climbed into the close following a disappointing 30-year auction (tailed with 4.189% high yield vs. 4.175% WI; 2.42x bid-to-cover vs. 2.43x in the prior month) and a bigger budget deficit. The Treasury reported a larger-than-expected budget deficit with outlays sharply boosted by higher interest payments.
• Fedspeak assists the move away from lows as Fed’s Daly (’24 voter) noted that the Fed still has more work to do and that the CPI data was largely as expected and that it doesn’t say ‘victory is ours’ on inflation. Daly added the Fed is yet to determine whether to raise and how long to hold rates, with Daly being data dependent and it premature to decide on another hike. There is a lot more info coming in before the September meeting and before year-end.
• This a reminder there will be no cash tsy trading in the Asian session today as Japan is out for observance of the Mountain Day public holiday.