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US TSYS: Treasuries Well Off Early Lows After S&P Flash PMIs Decline

US TSYS
USBulletMarketsFixed Income BulletsNorth America
  • Treasury futures look to finish mildly firmer Friday, well off early session lows after this morning's S&P Global US composite PMI surprisingly fell in the January flash release to its lowest since April after the 55.4 in December marked a 32-month high.
  • However, firms' expectations of output over the coming year remain strong looking at policies under the second Trump administration and inflationary pressures saw a four-month high which helped limit the dovish reaction from the headline services miss.
  • Meanwhile, U.Mich long-run inflation expectations were trimmed in the final January release from what had been a particularly sharp increase to the highest since 2008. 3.2% is still elevated though, having twice in the past three months exceeded what had been a typical 2.9-3.1% range since mid-2021.
  • The Greenback declined during the APAC session as headlines crossed from US President Trump around not wanting to use tariffs on China,. The theme has prevailed throughout the session (later bolstered by weaker than expected US PMI), cementing USD index losses in the region of 0.7%, and extending the weekly decline to around 2%.
  • After the bell, the Tsy Mar'25 10Y futures contract trades +3 at 108-15 vs. 108-07.5 low, well within technicals: resistance above at 109-04/109-06 (High Jan 21 / High Dec 31) vs. support at 108-00/107-06 (Low Jan 16 / 13 and the bear trigger). Curves well off early highs, 2s10s +0.110 at 35.143 vs. 38.045 high, 5s30 +0.270 at 41.706 vs. 44.753 high.
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  • Treasury futures look to finish mildly firmer Friday, well off early session lows after this morning's S&P Global US composite PMI surprisingly fell in the January flash release to its lowest since April after the 55.4 in December marked a 32-month high.
  • However, firms' expectations of output over the coming year remain strong looking at policies under the second Trump administration and inflationary pressures saw a four-month high which helped limit the dovish reaction from the headline services miss.
  • Meanwhile, U.Mich long-run inflation expectations were trimmed in the final January release from what had been a particularly sharp increase to the highest since 2008. 3.2% is still elevated though, having twice in the past three months exceeded what had been a typical 2.9-3.1% range since mid-2021.
  • The Greenback declined during the APAC session as headlines crossed from US President Trump around not wanting to use tariffs on China,. The theme has prevailed throughout the session (later bolstered by weaker than expected US PMI), cementing USD index losses in the region of 0.7%, and extending the weekly decline to around 2%.
  • After the bell, the Tsy Mar'25 10Y futures contract trades +3 at 108-15 vs. 108-07.5 low, well within technicals: resistance above at 109-04/109-06 (High Jan 21 / High Dec 31) vs. support at 108-00/107-06 (Low Jan 16 / 13 and the bear trigger). Curves well off early highs, 2s10s +0.110 at 35.143 vs. 38.045 high, 5s30 +0.270 at 41.706 vs. 44.753 high.