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Treasury Futures Edge Higher, Bostic Sees Just One Cut

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Treasury futures finished Friday at weekly highs, after spending most of the session trading sideways, there was little in the way of market headlines with rates seeing broad support following a large buy of 35,000 SFRM4 (3M Jun'24 SOFR futures). Another quiet day for eco data, with the Fed's Bostic again speaking.

  • Jun'24 10Y futures finished the week at 110-24, and as we get underway in Asia on Monday futures have ticked higher again now trade +05 at 110-29 and through initial resistance at 110-26+.
  • Looking at technical levels: Initial support lays at 109-24+ (Mar 18 low/ the bear trigger), further down 109-14+ (Nov 28 low), while we have just broken initial resistance at 110-26+ (Mar 21 high), above here 111-00+ (50-day EMA), a break above here would open a retest of 111-24 (Mar 12 high).
  • Atlanta Fed President Raphael Bostic now anticipates only one interest-rate cut this year, likely occurring later than previously expected, citing less confidence in inflation trajectory. Despite Fed officials' outlook for three rate cuts, Bostic notes the economy's resilience, advocating for patience and a slower pace in shrinking the central bank's balance sheet.
  • Underlying futures discounted yesterday's flash PMI inflation build, trading back near highs for the week while projected rate cut pricing gained ground: May 2024 at -16.5 vs. -14.5% this morning w/ cumulative -4.1bp at 5.286%; June 2024 -69.3% vs. -64.1% earlier w/ cumulative rate cut -21.5bp at 5.113%. July'24 cumulative at -33.5bp vs. -31.5bp.
  • Monday Data Calendar: Fed Speak, New Home Sales, Dallas Fed Mfg
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Treasury futures finished Friday at weekly highs, after spending most of the session trading sideways, there was little in the way of market headlines with rates seeing broad support following a large buy of 35,000 SFRM4 (3M Jun'24 SOFR futures). Another quiet day for eco data, with the Fed's Bostic again speaking.

  • Jun'24 10Y futures finished the week at 110-24, and as we get underway in Asia on Monday futures have ticked higher again now trade +05 at 110-29 and through initial resistance at 110-26+.
  • Looking at technical levels: Initial support lays at 109-24+ (Mar 18 low/ the bear trigger), further down 109-14+ (Nov 28 low), while we have just broken initial resistance at 110-26+ (Mar 21 high), above here 111-00+ (50-day EMA), a break above here would open a retest of 111-24 (Mar 12 high).
  • Atlanta Fed President Raphael Bostic now anticipates only one interest-rate cut this year, likely occurring later than previously expected, citing less confidence in inflation trajectory. Despite Fed officials' outlook for three rate cuts, Bostic notes the economy's resilience, advocating for patience and a slower pace in shrinking the central bank's balance sheet.
  • Underlying futures discounted yesterday's flash PMI inflation build, trading back near highs for the week while projected rate cut pricing gained ground: May 2024 at -16.5 vs. -14.5% this morning w/ cumulative -4.1bp at 5.286%; June 2024 -69.3% vs. -64.1% earlier w/ cumulative rate cut -21.5bp at 5.113%. July'24 cumulative at -33.5bp vs. -31.5bp.
  • Monday Data Calendar: Fed Speak, New Home Sales, Dallas Fed Mfg