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Treasuries Bear Steepen Ahead Of ADP, ISM

US TSYS
  • Cash Tsys bear steepen as long end yields make greater inroads at retracing Monday’s rally and lag European FI on the day, whilst the reversal in real yields after two days of moving lower weighs on risk assets.
  • 2YY +2.5bps at 4.117%, 5YY +5.3bps at 3.907%, 10YY +5.6bps at 3.689%, and 30YY +4.7bps at 3.741%. 2s10s of -42bps (+3bp) is near the top of the week's range.
  • TYZ2 trades 17+ ticks lower at 112-30+, back in the middle of Monday’s wide range albeit on below average volumes. Resistance is seen at yesterday’s high of 113-30 and support at 111-20+ (Sep 29 low).
  • Data: ADP (0815ET) and ISM Services (1000ET) headline but also see weekly MBA mortgage applications/rate, the final trade balance for August and final PMIs for September.
  • Fedspeak: Limited to Kashkari (0915ET) and Bostic (1600ET) after recent stacked schedules.
  • Bill issuance: US $30B 119-Day CMB auction – 1130ET

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