Tsys Futures Push higher Ahead Of Weekly Claims & Existing Home Sales

Treasuries marched off early session lows Wednesday, following EGBs lead despite pickup in inflation metrics. There was limited economic data, US mortgage applications rose despite higher rates - seasonally adjusted 3.3% last week after a flag week prior.

• Jun'24 10Y marked 108-08 session high late into the session following the release of Fed's Beige Book, the contract sold off a touch heading into the close to finished the session at 108-05, as trading gets underway on Thursday we are have opened -01 at 108-04
• Looking at technical levels: Initial support lays at 107-13+ (Apr 16 low), a break here would open a move to 107-07+ (76.4% of the Oct - Dec ‘23 bull leg). While to the upside resistance holds at 108-25+ (Apr 12 high), a break back above here would open up 109-02/26+ (Apr 8 low / Apr 10 high)
• Cash Treasury curve bull-flattened on Wednesday, yields were 5-9bps lower. The 2Y yield was -5.5bps at 4.932%, 10Y -8bps to 4.587%, while the 2y10y was -2.512 at -34.1697.
• Projected rate cut pricing steady vs. late Tuesday levels: May 2024 steady at -2.6% w/ cumulative -0.6bp at 5.322%; June 2024 steady at -16.2% w/ cumulative rate cut -4.7bp at 5.282%. July'24 cumulative at -12.6bp, Sep'24 cumulative -24.9bp.
• Fed Beige Book: overall economic activity expanded slightly on balance since late February. Ten out of twelve Districts experienced either slight or modest economic growth—up from eight in the previous report, while the other two reported no changes in activity.
• Looking ahead: Weekly Claims, Exist Home Sales, Fed Speak from Fed Gov Bowman, NY Fed Williams, Atlanta Fed Bostic and Boston Fed Collins.