Free Trial

Tsys Hold Weaker/Narrow Range Ahead Wed's July CPI

US TSYS

Treasury futures hold modestly weaker after the bell, near middle of session range on light summer volumes (TYU2<815k) - thin participation ahead of Wednesday's key CPI data: 0.2% est, 1.3% prior; YoY 8.7% est, 9.1% prior. Yield curves mostly flatter after the bell, 2s10s nearly tapped -50.0, new 22 year low of -49.264.

  • Morning data spurred buying in intermediates to long end:
    • Nonfarm labour productivity was roughly as expected in the preliminary Q2 release, falling -4.6% Q/Q saar after -7.4% as output fell -2.1%
    • With hourly compensation jumping 5.7% (but -4.4% in real terms), ULCs saw a smaller moderation than expected from 12.7% to 10.8% (cons 9.5%).
  • Tsy Auction: Muted react after $42B 3Y note auction (91282CFE6) small stop-through: 3.202% high yield vs. 3.205% WI; 2.50x bid-to-cover vs. 2.43x last month.
    • Indirect take-up climbed to 63.08% vs. 60.37% prior; direct bidder take-up at 17.28 vs. last month's 19.35%; primary dealer take-up 19.64% vs. 20.28%.
  • Cross asset update: Stocks off modest lows (SPX eminis at 4126.75 -15.00); Spot Gold firmer +6.58 at 1795.54; Crude near steady (WTI +0.04 at 90.80).
  • Currently, 2-Yr yield is up 7.9bps at 3.2841%, 5-Yr is up 7.4bps at 2.9797%, 10-Yr is up 4bps at 2.7974%, and 30-Yr is up 2.1bps at 3.0057%.

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.