Treasury Futures Off Lows Ahead Of US CPI Later Today

Treasury Futures climbed steadily off early week lows Tuesday, shorts pared ahead Wednesday's CPI & FOMC Minutes due out later today.

• Jun'24 10Y futures downtrend remains intact despite the bounce posted across the Tuesday session. The contract moved higher all session before briefly paring some gains after a weak $58b 3Y note auction, we closed the day at 109-20+, just off highs of 109-23. 10Y futures have opened unchanged since NY closing levels at 109-20+
• Looking at technical levels: Initial support lays at 109-00 (round number support), a break here would open up a move to 108-25+ (2.00 proj of Dec 27 - Jan 19 - Feb 1 price swing). While to the upside resistance holds at 110-06 (Apr 4 high), above here 110-24+/31+ (50-day EMA / Mar 27 high and key resistance)
• Cash Treasury curve bull-flattened on Tuesday, with yields 4-7bps lower. The 2Y yield was -4.6bps at 4.743%, 10Y -5.8bp to 4.362%, while the 2y10y -1.005 at -33.306.
• MNI U.S. CPI Preview: Apr 2024 - Key Framing Of Trends With June Cut Seen As A Coin Toss (see link)
• Projected rate cut pricing firmer vs. late Monday levels: May 2024 at -6.7% vs. -4.7bp late Monday w/ cumulative -1.7bp at 5.312%; June 2024 at -53.4% vs. -48.8% w/ cumulative rate cut -15bp at 5.179%. July'24 cumulative at -24.6bp vs -22.1bp, Sep'24 cumulative -41bp vs. -38.2bp.
• Looking Ahead: MBA Mortgage Applications, CPI and March FOMC minutes later today.