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US TSYS: Two-Stage Sell-Off, 3Y Supply Ahead Before CPI Tomorrow

US TSYS
USBulletMarketsFixed Income BulletsNorth America
  • Treasuries trade modestly lower on the day having sold off in two steps. The first leg paired previous gains and looked to tally with European FI reflecting on yesterday’s late Treasury sell-off along with some technical breaks. A second step lower coincided with a lift for equity futures before a further helping hand from a notable jump in small business optimism post-election.
  • Data focus is more firmly on tomorrow’s CPI report although a resumption of supply with today’s 3Y auction will be of interest after strong auctions for 2s, 5s and 7s in late November.  
  • Cash yields are 1.6-3.3bps higher, with the long end leading increases.
  • 2s10s has recently touched 9.4bps for fresh highs since Bessent’s Treasury pick helped see brief inversion.  
  • TYH5 has seen an overnight low of 110-31 (-06+) in recent trading where it appears to have met some modest support around the 111-00 mark. Volumes are light, only just over 250k.
  • More notable support is seen at 110-18 (Dec 4 low), and a 4.25% 10Y yield would coincide with 110-26 in the interim, although the recently designated bull cycle is seen in play with resistance at 111-20+ (Dec 6 high).
  • Data: Nonfarm productivity/ULCs Q3 final (0830ET)
  • Note/bond issuance: US Tsy $58B 3Y Note auction - 91282CMB4 (1300ET)
  • Bill issuance: US Tsy $70B 42D CMB auction (1130ET)
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  • Treasuries trade modestly lower on the day having sold off in two steps. The first leg paired previous gains and looked to tally with European FI reflecting on yesterday’s late Treasury sell-off along with some technical breaks. A second step lower coincided with a lift for equity futures before a further helping hand from a notable jump in small business optimism post-election.
  • Data focus is more firmly on tomorrow’s CPI report although a resumption of supply with today’s 3Y auction will be of interest after strong auctions for 2s, 5s and 7s in late November.  
  • Cash yields are 1.6-3.3bps higher, with the long end leading increases.
  • 2s10s has recently touched 9.4bps for fresh highs since Bessent’s Treasury pick helped see brief inversion.  
  • TYH5 has seen an overnight low of 110-31 (-06+) in recent trading where it appears to have met some modest support around the 111-00 mark. Volumes are light, only just over 250k.
  • More notable support is seen at 110-18 (Dec 4 low), and a 4.25% 10Y yield would coincide with 110-26 in the interim, although the recently designated bull cycle is seen in play with resistance at 111-20+ (Dec 6 high).
  • Data: Nonfarm productivity/ULCs Q3 final (0830ET)
  • Note/bond issuance: US Tsy $58B 3Y Note auction - 91282CMB4 (1300ET)
  • Bill issuance: US Tsy $70B 42D CMB auction (1130ET)