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Subdued Open To The Week, CPI Data On Tuesday

US TSYS

TYM4 is trading at 111-24, unchanged from NY closing levels on Friday.

  • This comes after cash US tsys finished marginally richer following the release of the February US Employment Report on Friday. The US 2-year yield declined initially to 4.40% from 4.49%, before closing 3bps lower at 4.47%. The 10-year yield finished 1bp lower at 4.07%.
  • US jobs data was mixed, with payrolls increasing by a stronger than expected +275k (+200k est.). However, there was a combined 167k downward revision to the prior two months and the unemployment rate unexpectedly increased to 3.9%, a 2-year high. Wage gains slowed, rising 0.1% in February and 4.3% annually. The report is consistent with a labour market that is gradually easing but no signs of near-term weakness.
  • According to MNI’s technicals team, the contract last week topped resistance at the 50-day EMA highlighting a bullish reversal. 111-27, 50% of the down leg off the Feb 1 high, has been breached. This opens 112-10+, a Fibonacci retracement. For bears, a reversal lower would return focus back to support at the 109-25+ bear trigger, Feb 23 low. Initial firm support to watch lies at 110-21, the Mar 4 low.
  • Focus turns to next week Tuesday's CPI release at 0830ET.

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