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Tsys Near Middle Wide Range, Focus on Tue's CPI Data

US TSYS
  • Treasury futures are drifting in marginally firmer territory after the bell, near the middle of a wide range on mixed reaction to this morning's February employment data. Tsys gapped lower on the higher than expected jobs gain of 275k vs. 200k est. but reversed course just as quickly as markets digested the large down revisions to January (229k from 335k, private to 177k from 317k).
  • The unemployment rate surprisingly increased two tenths from 3.66% to 3.86% (cons 3.7), poking above October’s 3.84 for the highest since Jan’22. The FOMC eyes 4.1% for end-2024.
  • Currently, Jun'24 10Y futures are +2.5 at 111-23.5 (111-08 low/112-04.5 high). The contract has this week topped resistance at the 50-day EMA highlighting a bullish reversal. 111-27, 50% of the downleg off the Feb 1 high, has been breached. This opens 112-10+, A Fibonacci retracement. For bears, a reversal lower would return focus back to support at the 109-25+ bear trigger, Feb 23 low. Initial firm support to watch lies at 110-21, the Mar 4 low.
  • Focus turns to next week Tuesday's CPI release at 0830ET.

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