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Treasury Futures Under Pressure Ahead Thursday PPI, Retail Sales

US TSYS

Treasury futures extended lows into the NY close there was no particular headline driver, limited data on the day: MBA Mortgage Applications at 7.1% vs. 9.7% prior. Carryover weakness after Tuesday's higher than hoped for CPI inflation data in the lead up to Thursday's PPI and Retail sales

  • Jun'23 10Y futures traded through Tuesday's low of 111-02.5 to finish the Wednesday session down 08 + to 110-29 and as trading kicks off in Asia on Thursday, futures are again slightly weaker down 01+ to 110-28+.
  • Looking at technical levels, initial supports holds at 111-03+ (Mar 13 low), below there 110-21 (Mar 4 low), to the upside, initial resistance is 112-04+ (Mar 8 highs) while above is 112-10+ (61.8% retracement of the Feb 1 - 23 bear leg)
  • Projected rate cut pricing over the next three meetings evaporating: March 2024 chance of 25bp rate cut currently -0.8% w/ cumulative of -0.02bp at 5.328%; May 2024 at -12.4% vs. -14.5% late Tuesday w/ cumulative -3.3bp at 5.297%; June 2024 -59.5% vs. -63% late Tuesday w/ cumulative cut -18.2bp at 5.148%. July'24 cumulative -31.2bp at 4.993%.
  • Looking ahead: Retail Sales, PPI and Job Claims out later Today
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