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US TSYS: Tsys Extend Late Lows, ECB Guidance May Not Be As Dovish as Expected

US TSYS
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  • Treasuries drifting near moderate session lows after the bell, decent overall volumes (TYH4 >1.4M) as rates extended lows late on headline the ECB may not be as aggressive in cutting rates in early 2025 after cutting 25bp this morning.
  • No where near where US markets started the session: slightly higher than expected PPI and weekly jobless claims saw Tsys see-saw to early session highs (TYH5 110-25) before ratcheting lower by midmorning.
  • Producer price inflation picked up by more than expected in November, at +0.4% (0.38% unrounded) M/M vs 0.3% prior (0.25%, reflecting an upward revision from 0.20% initial). The core indices were cooler though: ex-food/energy registered 0.2% (from 0.3% prior, in line with expectations) and the more important ex-food/energy/trade services printed an 18-month low of 0.05% unrounded (0.34% prior, and vs 0.2% expected).
  • Initial jobless claims were firmly higher than expected at 242k (sa, cons 220k) in the week to Dec 7 after a marginally upward revised 225k (initial 224k). That’s the highest single week since Oct 12 although the four-week average saw a more muted 5k increase to 224k away from recent lows of 218/219k having been exactly in line with the 2019 average.
  • Treasuries extended lows after the $22B 30Y auction reopen (912810UE6) tailed 1.2bp: 4.535% high yield vs. 4.523% WI; 2.39x bid-to-cover vs. 2.64x in the prior month.
  • Limited data ahead Friday with import/export prices, the main focus remains on next weeks FOMC policy announcment on Wednesday, Dec 18. 
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  • Treasuries drifting near moderate session lows after the bell, decent overall volumes (TYH4 >1.4M) as rates extended lows late on headline the ECB may not be as aggressive in cutting rates in early 2025 after cutting 25bp this morning.
  • No where near where US markets started the session: slightly higher than expected PPI and weekly jobless claims saw Tsys see-saw to early session highs (TYH5 110-25) before ratcheting lower by midmorning.
  • Producer price inflation picked up by more than expected in November, at +0.4% (0.38% unrounded) M/M vs 0.3% prior (0.25%, reflecting an upward revision from 0.20% initial). The core indices were cooler though: ex-food/energy registered 0.2% (from 0.3% prior, in line with expectations) and the more important ex-food/energy/trade services printed an 18-month low of 0.05% unrounded (0.34% prior, and vs 0.2% expected).
  • Initial jobless claims were firmly higher than expected at 242k (sa, cons 220k) in the week to Dec 7 after a marginally upward revised 225k (initial 224k). That’s the highest single week since Oct 12 although the four-week average saw a more muted 5k increase to 224k away from recent lows of 218/219k having been exactly in line with the 2019 average.
  • Treasuries extended lows after the $22B 30Y auction reopen (912810UE6) tailed 1.2bp: 4.535% high yield vs. 4.523% WI; 2.39x bid-to-cover vs. 2.64x in the prior month.
  • Limited data ahead Friday with import/export prices, the main focus remains on next weeks FOMC policy announcment on Wednesday, Dec 18.