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Tsys Futures Open Higher, 2y10y Most Inverted Since Dec, Memorial Day

US TSYS
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Cash treasuries closed early on Friday, with the curve twist flattening ahead of a full closure for Memorial Day Today. The 2y10y is now trading at the lowest levels since late December. U.Mich inflation expectations gave back more of their preliminary rise in May than expected, leaving only a 0.1pp rise in the 1Y from April and the 5-10Y unchanged at 3.0% for well within its mostly held 2.9-3.1% range seen in recent years.

  • Jun'24 10Y futures closed Friday down (- 00+) at 108-22+ and off session lows of 108-16. Futures traded to the lows of the day ahead of U. of Mich. Sentiment data release, before the long-end pared most of the days move lower as sentiment increased, front-end underperformed the move with TU closing the session down (- 01.25) at 101-14.625. TY have opened up (+ 03) at 108-25+ in early trading.
  • Treasuries traded lower Thursday on the back of strong PMI data, extending the pullback from the recent 109-31+ high on May 16. Support to watch lies at 108-15 (May 14 lows), on the upside initial resistance is 109-05 (50-day EMA).
  • The treasury curve twist-flattened on Friday with yields 1.1bps higher to 1.5bps lower, the 2Y yield +1.1bps at 4.946%, 10Y -1.2bps to 4.465%, while the 2y10y -2.265 at -48.546
  • US data: Durable Goods Orders 0.7% vs -0.8% est, Durables Ex Transportation 0.4% vs 0.1% est. U. of Mich. Sentiment 69.1 vs 67.7 est, Conditions 69.6 vs 68.8 est, Expectations 68.8 vs 67.0, 1yr Inflation 3.3%3.4% est & 5-10yr Inflation 3.0% vs 3.1% est.
  • Fed Funds implied rates have extended the post-PMIs jump higher in what’s been a thin data week, with 20bp of cumulative cuts for Nov (25bp prior to PMIs) and 34bps for Dec (38bps prior).
  • Looking ahead: Calendar is empty, cash trading is closed for Memorial Day
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Cash treasuries closed early on Friday, with the curve twist flattening ahead of a full closure for Memorial Day Today. The 2y10y is now trading at the lowest levels since late December. U.Mich inflation expectations gave back more of their preliminary rise in May than expected, leaving only a 0.1pp rise in the 1Y from April and the 5-10Y unchanged at 3.0% for well within its mostly held 2.9-3.1% range seen in recent years.

  • Jun'24 10Y futures closed Friday down (- 00+) at 108-22+ and off session lows of 108-16. Futures traded to the lows of the day ahead of U. of Mich. Sentiment data release, before the long-end pared most of the days move lower as sentiment increased, front-end underperformed the move with TU closing the session down (- 01.25) at 101-14.625. TY have opened up (+ 03) at 108-25+ in early trading.
  • Treasuries traded lower Thursday on the back of strong PMI data, extending the pullback from the recent 109-31+ high on May 16. Support to watch lies at 108-15 (May 14 lows), on the upside initial resistance is 109-05 (50-day EMA).
  • The treasury curve twist-flattened on Friday with yields 1.1bps higher to 1.5bps lower, the 2Y yield +1.1bps at 4.946%, 10Y -1.2bps to 4.465%, while the 2y10y -2.265 at -48.546
  • US data: Durable Goods Orders 0.7% vs -0.8% est, Durables Ex Transportation 0.4% vs 0.1% est. U. of Mich. Sentiment 69.1 vs 67.7 est, Conditions 69.6 vs 68.8 est, Expectations 68.8 vs 67.0, 1yr Inflation 3.3%3.4% est & 5-10yr Inflation 3.0% vs 3.1% est.
  • Fed Funds implied rates have extended the post-PMIs jump higher in what’s been a thin data week, with 20bp of cumulative cuts for Nov (25bp prior to PMIs) and 34bps for Dec (38bps prior).
  • Looking ahead: Calendar is empty, cash trading is closed for Memorial Day