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Treasuries Continue Yesterday's Sell-Off After Brief Retracement

US TSYS
  • Cash Tsys have resumed yesterday’s sell-off after initially trading richer in Asian hours, with the more recent move lower helped by Pelosi set to leave Taiwan and EA PMIs being revised higher in final July readings as attention turns to the US PMI surveys and more importantly ISM Services in the US session.
  • 2YY +4.3bps at 3.096%, 5YY +3.9bps at 2.892%, 10YY +3.6bps at 2.785% and 30YY +2.3bps at 3.029%. It sees 2s10s little changed on the day and still close to 2000 lows (-0.5bps at -30.5bps) although the 3M to 10Y spread continues to shift higher to +26.5bps as it sharply bounced yesterday having fleetingly dipped into inversion early on.
  • TYU2 trades 8+ ticks lower at 119-27+ as the rally stalls further amidst above average volumes. It moves further through yesterday’s low and closer to support at 119-19+ (Jul 27 low), clearance of which would open the 50-day EMA of 118-23+.
  • Data: ISM Services is in focus today but there is also finalised S&P Global PMIs and factory orders plus the usual weekly MBA mortgage applications.
  • Fedspeak: Bullard (’22) at 0730ET, Harker (’23) at 1030ET, Daly (’24) at 1115ET, Barkin (’24) at 1145ET and Kashkari (’23) at 1430ET.
  • Bill issuance: US Tsy $30B 119D bill auction – 1130ET
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  • Cash Tsys have resumed yesterday’s sell-off after initially trading richer in Asian hours, with the more recent move lower helped by Pelosi set to leave Taiwan and EA PMIs being revised higher in final July readings as attention turns to the US PMI surveys and more importantly ISM Services in the US session.
  • 2YY +4.3bps at 3.096%, 5YY +3.9bps at 2.892%, 10YY +3.6bps at 2.785% and 30YY +2.3bps at 3.029%. It sees 2s10s little changed on the day and still close to 2000 lows (-0.5bps at -30.5bps) although the 3M to 10Y spread continues to shift higher to +26.5bps as it sharply bounced yesterday having fleetingly dipped into inversion early on.
  • TYU2 trades 8+ ticks lower at 119-27+ as the rally stalls further amidst above average volumes. It moves further through yesterday’s low and closer to support at 119-19+ (Jul 27 low), clearance of which would open the 50-day EMA of 118-23+.
  • Data: ISM Services is in focus today but there is also finalised S&P Global PMIs and factory orders plus the usual weekly MBA mortgage applications.
  • Fedspeak: Bullard (’22) at 0730ET, Harker (’23) at 1030ET, Daly (’24) at 1115ET, Barkin (’24) at 1145ET and Kashkari (’23) at 1430ET.
  • Bill issuance: US Tsy $30B 119D bill auction – 1130ET