Tsys End Trading Near Session Highs Ahead Of NFP Later

Treasury futures were little changed on Thursday and pared losses in the second half of the session, volatility picked up as the ECB announced rate cuts and higher than expected weekly claims saw tsys hit session lows. Tsys then saw a reversal, there were no particular headlines that looked to drive it, just renewed position squaring ahead of NFPs later today.

• Treasuries maintain a firmer short-term tone and this week’s move higher has reinforced the current bullish theme. On Thursday front-end outperformed slightly, with TU +0-00¾ at 102-06¾, while TY finished +0-02 at 110-11+.
• Looking at TYU4 technical levels, initial support is at 109-14 (50-day EMA), with the 109-07 (20-day EMA) the next target. While to the upside initial resistance is at 110-12+ (June 5 high), a break here would see a test of 110-17 (April 4 highs)
• Cash treasury curve was slightly steeper on Thursday with yields flat to 1.5bps higher. The 2Y +0.2bp to 4.724%, the 10Y +1.2bps at 4.287% while the 2y10y was +0.770 at -44.117.
• On the Data front: Trade Balance for Apr was -$74.6b vs -$76.5b est, down from -$68.6b in March. Initial Jobless Claims for June 1 were 229k vs 220k est, Continuing Claims were 1,792k vs 1,790k est.
• Looking ahead; NFP and Wholesale Inventories