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Tsys Extending Highs, US$ Cooling

US TSY FUTURES
Front month Treasury futures are extending late overnight highs in the last couple minutes, 10Y marks 114-18.5 (+7), yield 3.5641 (-.0362), short end gaining, curves mildly steeper (2s10s +.507 at -59.300).
  • Appears to coincide with US$ scaling back Monday support, in addition to a steady rally in stocks on the back of solid earnings announcements from Goldman Sachs ($8.79 EPS vs. $8.21 est) and Bank of America ($.94 EPS vs. $.82 est).
  • Fed funds implied hike for May'23 at 22.0bp, Jun'23 +28.2bp cumulative at 5.111%, while projected rate cuts later in the year gain slightly: Nov'23 cumulative -11.5bp to 4.714%, Dec'23 cumulative -30.4bp at 4.524.Fed Terminal currently at 5.095% in Jul'23.

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