Treasury Futures Gaps Lower On the Open As Waller Speaks

Treasuries futures traded higher throughout the Wednesday session, partially driven by month end extensions and result of strong 7Y auction. Futures climbed to the highest level since March 14 of 110-31+(testing 50-day EMA resistance) after the $43B 7Y note auction (91282CKC4) stopped through with 4.185% high yield vs. 4.192% WI; 2.61x bid-to-cover vs. 2.58x last month.

• Jun'24 10Y have gapped lower on the open as Fed Reserve Gov Waller is speaking, where he has mentioned the Fed should wait before cutting rates. futures opened at 110-28, and has hit a low of 110-24+ were we trade right now down 04+.
• Looking at technical levels: Initial support lays at 110-08+ (Mar 21 low) while below here the 109-24+ (Mar 18 low/ the bear trigger), further down 109-14+ (Nov 28 low). While to the upside resistance holds at 110-30+ (Mar 21 & 22 high), above here 110-31+ (50-day EMA), while a break above here would open a retest of 111-24 (Mar 12 high).
• Cash Treasury curve bull-flattened on Wednesday, with yields 2-5bps lower. The 2Y yield was -2.3bps at 4.568%, 10Y -4.1bps to 4.19%, while the 2y10y -1.851 at -38.199
• On the data front, MBA composite mortgage applications fell for the second consecutive week, by a seasonally adjusted -0.7% in the week to March 22, with purchases -0.2% and refis -1.6%.
• Thursday Data Calendar: Weekly Claims, GDP, PCE, PMI, UofM Sentiment.