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Treasuries On Balance Holding Richer Ahead Of Powell, Stacked Docket

  • Cash Tsys have unwound some of the overnight bid but are on balance still aided by softer data, with Australia CPI missing, a weak round of Chinese PMI readings before more mixed Eurozone HICP inflation with headline missing but core in line.
  • Little change in Fed rate path expectations keeps the front-end fairly well anchored coming ahead of a heavy US docket including Powell speaking at 1330ET, driving a modest flattening on the day that merely chips away at yesterday’s steepening with 2s10s at -74bps.
  • 2YY -0bps at 4.473%, 5YY -1.6bps at 3.908%, 10YY -1.7bps at 3.727%, and 30YY -1.6bps at 3.786%.
  • TYH3 trades 3+ ticks lower at 113-02+ as part of a corrective pullback. Support seen at 112-23+ (50-day EMA) having come close yesterday with 112-28 whilst resistance at 113-27 (Nov 28 high).
  • Fedspeak: Bowman (0850ET), Cook (1235ET, text), Chair Powell (1330ET, text) before Beige Book (1400ET).
  • Data: ADP employment (0815ET), 2nd release of Q3 GDP (0830ET), Wholesale inventories Oct (0830ET), MNI Chicago PMI (0945ET), JOLTS Oct (1000ET), Pending home sales (1000ET) plus weekly MBA mortgage apps/rates.
  • Bill issuance: US to sell $33B 17-W bills (1130ET).

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