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EUROZONE

Timeline of key events (Times GMT)

GBPUSD TECHS

Trend Needle Still Points South

EURUSD TECHS

Trend Outlook Remains Bearish

FED FUNDS FUTURES

FFF2 Given

EUROSTOXX50 TECHS

(Z1) Resumes Its Slide

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The lack of macro headline flow and the Thanksgiving holiday-hampered nature of the session (when it comes to both liquidity and a shortened trading day for futures/closure for cash Tsys) has resulted in a narrow round of trade for TYZ1 thus far. The contract last deals -0-01 at 129-25, operating within the confines of a 0-03+ range.

  • To recap, the curve was subjected to twist flattening pressure on Wednesday, with 2s and 3s 2.5bp cheaper, 5s little changed and 30s ~6.5bp richer. The 5-/30-Year yield spread printed yet another YtD flat in the process, after the long end rebounded from session cheaps.
  • San Francisco Fed President Daly, one of the more dovish members of the current Fed cohort, took markets by surprise early in the NY day, pointing to an openness re: a faster tapering timeline, although she did note that she would need to see more data before making such a decision. This pressured the front end of the curve, with further Fed rate hike premium baked in.
  • A much larger than exp. fall in initial jobless claims was seen (with the print hitting the lowest level witnessed since the '60s), while personal spending & income data beat expectations as the headline PCE readings roughly met broader exp, ticking up from the previous month.
  • There was no real reaction to the minutes from the latest FOMC meeting, with worries re: longer lasting inflationary forces, the potential for a faster tapering timeline and risks of a quicker than envisaged start of a hiking cycle if inflationary pressures persist presenting the major takeaways.