Treasuries Back to Pre-CPI Levels Ahead Chairman Powell Policy Testimony

Treasury futures finished Tuesday off their highs made during the first half of the US session. Futures gapped higher, touching daily highs after lower than expected ISM Services Index of (52.6 vs. 53.0 est) and Prices Paid (58.6 vs. 62.0 est), as well as lower than expected Factory Orders (-3.6% vs. -2.9% est); Ex Trans (-0.8% vs. -0.1% est) data.

• Jun'24 10Y futures pushed higher all throughout the Tuesday session, touching lows of 110-23+ in earlier Asia trading before finished Tuesday up +17 at 111-09+ just off session highs of 111-15, as trading gets underway in Asia for Wednesday futures are giving back some of the moves from Friday opening down - 03+ at 111-06
• Futures broke through initial technical resistance at 111-11+ (38.2% retracement of the Feb 1 - 23 bear leg) on Tuesday but has been unable to hold above there, focus to be on if we can hold back above, a break above would open 111-24+ (High Feb 13), while to the downside levels to include 110-05+/109-25+ Low Mar 1 / Low Feb 23 and bear trigger.
• Treasury curves bull flattened on Tuesday with yields 4-7bps lower across the curve, the 2Y was -4.4bps lower at 4.558%, 10Y was -6.1bps lower at 4.153, while the 2y10y finished-1.672 at -40.750
• Looking Ahead: MBA Mortgage Applications, ADP Employment Change, JOLTS Job Openings, Wholesale Inventories MoM, Federal Reserve Releases Beige Book, While Fed Chair Powell Testifies Before Congress