November 15, 2022 10:29 GMT
Tsy Futures Eye Post-CPI Highs
BONDS
Global core FI is stronger across geographies and curves early Tuesday, with the USD under a little pressure, and terminal Fed funds expectations pulling back a little.
- Against that backdrop, US Tsy futures are nearing the post-CPI, pre-Veterans Day highs (112-19 the level to watch for TYZ2).
- Bunds and Gilts are strnger, but periphery EGBs are outperforming in Europe (10Y BTP spreads to Bunds are testing 200bp again).
- While data hasn't hugely moved markets, there has been plenty: UK wage data impressed; CPIs in the Eurozone were finals, EU GDP was in-line, and German ZEW improved strongly.
- Main focus for the rest of the session is on US PPI, which while unlikely to have much impact, will be eyed for further pipeline inflation pressures. Empire State Manufacturing also worth watching.
- ECB speakers later include Holzmann and Elderson; Fed speakers: Harker, Cook, and Barr.
Latest levels:
- Dec 10-Yr US futures (TY) up 12/32 at 112-16 (L: 112-00.5 / H: 112-16.5)
- Dec Bund futures (RX) up 66 ticks at 139.2 (L: 138.38 / H: 139.3)
- Dec Gilt futures (G) up 12 ticks at 104.44 (L: 104.04 / H: 104.73)
- Italy / German 10-Yr spread 4.3bps tighter at 199.1bps
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