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Treasury Futures Edge Higher Ahead of FOMC Minutes, Fed Speak shortly

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Treasury futures rebounded from Monday's losses Tuesday, taking the dovish side of two-way comments from Fed Gov Waller. Decent corporate debt issuance climbed over $12B, rate lock hedging helped constrain short cover/position squaring support. Up shortly, the Fed's Bostic Moderates Panel with Collins and Mester, while Goolsbee will appear on MSNBC a bit later.

  • Jun'24 10Y futures closed the session up (+ 04+) at 109-07+, slightly off session's best of 109-10+. As trading gets underway on Wednesday, we are little changed.
  • Despite the latest pullback in Treasuries, the short-term trend condition remains bullish. Support now holds at 108-28 (20-day EMA), a break below here would see us look to test 108-15 (May 14 low), while to the upside initial resistance holds at 109-31+ (May 16 high/Bull trigger).
  • The treasury bull-flattened on Tuesday, with yields 1-4bps lower, the 2Y yield -1.9bps at 4.829%, 10Y -3.1bps to 4.412%, while the 2y10y +0.992 at -41.868
  • Recent U.S. economic data indicate high interest rates are helping to cool off demand and disinflation has likely resumed, but the Federal Reserve needs to see several more months of good inflation data before cutting rates, Governor Christopher Waller said Tuesday.
  • Rate cut projections hold steady vs. late Monday: June 2024 at -5% w/ cumulative rate cut -1.2bp at 5.318%, July'24 at -20% w/ cumulative at -6.3bp at 5.267%, Sep'24 cumulative -19.9bp, Nov'24 cumulative -27.6bp, Dec'24 -43.7bp.
  • Looking ahead: May 1 FOMC Minutes, Existing Home Sales and US Tsy 20Y Bond Sale.
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Treasury futures rebounded from Monday's losses Tuesday, taking the dovish side of two-way comments from Fed Gov Waller. Decent corporate debt issuance climbed over $12B, rate lock hedging helped constrain short cover/position squaring support. Up shortly, the Fed's Bostic Moderates Panel with Collins and Mester, while Goolsbee will appear on MSNBC a bit later.

  • Jun'24 10Y futures closed the session up (+ 04+) at 109-07+, slightly off session's best of 109-10+. As trading gets underway on Wednesday, we are little changed.
  • Despite the latest pullback in Treasuries, the short-term trend condition remains bullish. Support now holds at 108-28 (20-day EMA), a break below here would see us look to test 108-15 (May 14 low), while to the upside initial resistance holds at 109-31+ (May 16 high/Bull trigger).
  • The treasury bull-flattened on Tuesday, with yields 1-4bps lower, the 2Y yield -1.9bps at 4.829%, 10Y -3.1bps to 4.412%, while the 2y10y +0.992 at -41.868
  • Recent U.S. economic data indicate high interest rates are helping to cool off demand and disinflation has likely resumed, but the Federal Reserve needs to see several more months of good inflation data before cutting rates, Governor Christopher Waller said Tuesday.
  • Rate cut projections hold steady vs. late Monday: June 2024 at -5% w/ cumulative rate cut -1.2bp at 5.318%, July'24 at -20% w/ cumulative at -6.3bp at 5.267%, Sep'24 cumulative -19.9bp, Nov'24 cumulative -27.6bp, Dec'24 -43.7bp.
  • Looking ahead: May 1 FOMC Minutes, Existing Home Sales and US Tsy 20Y Bond Sale.