Tsys Futures Rebound Post Asia On Friday, Yield Curves Bull Flatten

Treasury futures moved higher post Asia on Friday closing the week at 109-29+, after tapping the lowest levels since November 2023 of 109-09. There was little in the way of market headlines or economic data on Friday.

• Mar'24 10Y futures had tested lows 109-09 Friday, a break of initial support of 109-17/16 but was able to climb back above and close the week at 109-29+, as Trading gets underway we are just below those levels at 109-27. Volumes were heavy (TYH4>3.8M) tied to the roll to Jun'24 contract. Looking forward initial support is 109-09 (Low Feb 23) a break and hold below here opens the Nov 28 lows at 109-05+, to the upside initial resistance is at 110-15.5 (20-day EMA).
• Treasury yield curves bull flattened on Friday 2Y yield was -2.2bps lower at 4.690%, the 10Y yield was -7.3bps lower at 4.248% while the 2y10y -5.271 at -44.590, to close at the lowest levels of the year.
• Projected rate cut pricing holds steady for the next couple meetings while June is off this morning's lows: March 2024 chance of 25bp rate cut currently -2.0% w/ cumulative of -0.5bp at 5.324%; May 2024 at -21.2% w/ cumulative -5.8bp at 5.271%; June 2024 -62.6% vs. -55.4% earlier w/ cumulative cut -21.4bp at 5.132%. Fed terminal at 5.33% in Feb'24.
• Look ahead: New Home Sales & Dallas Fed Mfg Activity Index. Treasury auctions $63B 2Y & $64B 5Y, $70B 26W bills, $79B 13W bills auctions