Tsys Futures Head Higher As Retail Sales Miss, CPI In-Line

Treasury futures were near session highs after the bell and not far off this morning's post-Retail Sales (and down-revisions to prior release) and CPI data highs, supercore CPI at a still hot but broadly as expected 0.42% M/M (and with its large 0.19pp contribution from vehicle insurance that isn’t reflected in PCE).

• Jun'24 10Y futures made highs of 109-26+ post CPI, we did see a brief pull-back before the move higher continued into the close finished the session up (+0-20) at 109-23, as Asia logs in we are a touch higher at 109-24+. We now trade just below the 100-day EMA situated at 109-25, a break above here could see us target 110-02 (200-Day EMA).
• The treasury curve was little changed today, yields were 8-11bps lower with the 3-7yr part of the curve the best supported, with the 2Y yield -9.1bps at 4.724%, 10Y -9.9bps to 4.340%, while the 2y10y -0.845 at -38.581
• US retail sales had their poorest performance in 3 months in April, with weakness evident across the board, partially reversing March's strong gains. Overall retail sales were flat (+0.4% expected), pulling back from +0.6% in March, while ex-auto/gas sales were -0.1% (+0.2% expected) vs +0.7% in March. Each represented the poorest outturn in 3 months.
• In-turn, short end rate cut pricing now projects two 25bp rate cuts by year end (Sep & Dec).
• Looking Ahead: Weekly Claims, Build Permits and more Fed Speak