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AUSSIE 10-YEAR TECHS

(Z1) Off Lows, But Remains Weak

USDCAD TECHS

Still Vulnerable

AUDUSD TECHS

Bullish Price Sequence

Steeper And Steeper

US TSYS SUMMARY

A bearish start to the week, with yields on the curve 10 years out hitting highest levels since at least March 2020 as the reflation trade continues.

  • With the short end anchored, the curve continues to steepen. The 2-Yr yield is up 0.4bps at 0.1052%, 5-Yr is up 1.8bps at 0.48%, 10-Yr is up 2.9bps at 1.1929%, and 30-Yr is up 2.3bps at 1.9938% (touching 2% for the first time since Feb 2020).
  • Mar 10-Yr futures (TY) down 6/32 at 136-16 (L: 136-14.5 / H: 136-22) on strong (~350k) volume.
  • Real yields have failed to keep pace so far though, with higher inflation breakevens the driver (oil pushing to a one-year high too).
  • Attention on fiscal stimulus and vaccine rollout hopes, with COVID case numbers dropping in the US and globally. Stock futures have retraced slightly after all-time highs in Asia-Pac session; USD bouncing from early lows.
  • A quiet calendar to start the week: Fed's Mester speaks at 1200ET, but no data of interest (some attention on CIP revisions).
  • In supply, $105B of 13-/26-week bill auction at 1130ET. NY Fed buys ~$3.625B of 7Y-20Y Tsys.
MNI London Bureau | +44 203-865-3807 | tim.cooper@marketnews.com
MNI London Bureau | +44 203-865-3807 | tim.cooper@marketnews.com