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US TSYS: TYH5 Briefly Through Technical Support, Yield Taps 4.5966% High

US TSYS
USBulletMarketsFixed Income BulletsNorth America
  • Treasury futures continue to extend the low end of the day's range in late trade, TYH5 briefly traded through 108-16.5 support before bouncing to 108-17 after the bell. Curves steeper with short end rates outperforming (2s10s now at 25.015 vs. 19.960 low) - despite late 2s5s flattener block in late trade: 17,300 TUH5 102-21.38, slightly through the 102-21.25 post time offer vs. 15,300 FVH5 106-04.37, well through the 106-03.75 post time offer.
  • Meanwhile, projected rate cuts into early 2025 look steady to slightly lower vs. this morning (*) as follows: Jan'25 steady at -2.1bp, Mar'25 -11.7bp (-13.7bp), May'25 -16.0bp (-18.8bp), Jun'25 -23.4bp (-25.3bp).
  • Little reaction to a flurry of mixed data: November posted improved home sales figures compared with a soft October, but revised New home sales came in roughly as expected at 664k on a seasonally-adjusted annualized rate, up from 627k prior (upwardly revised from 610k), following on from data showing a 4.8% M/M increase in existing home sales in November to the highest level since March at 4.15M.
  • Headline durable goods orders figure of -1.1% M/M, the "miss" vs -0.3% expected was offset by an upward revision to the prior growth reading to 0.8% from 0.3%. Transportation equipment - a typically volatile category - led the decline, falling -2.9% M/M, with nondefense aircraft/parts down 7.0%.
  • Tsy $69B 2Y note auction (91282CME8) came out on the screws: 4.335% high yield vs. 4.335% WI; 2.73x bid-to-cover vs. 2.77x prior. Tuesday sees Tsy $28B 2Y FRN & $70B 5Y Note auctions.
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  • Treasury futures continue to extend the low end of the day's range in late trade, TYH5 briefly traded through 108-16.5 support before bouncing to 108-17 after the bell. Curves steeper with short end rates outperforming (2s10s now at 25.015 vs. 19.960 low) - despite late 2s5s flattener block in late trade: 17,300 TUH5 102-21.38, slightly through the 102-21.25 post time offer vs. 15,300 FVH5 106-04.37, well through the 106-03.75 post time offer.
  • Meanwhile, projected rate cuts into early 2025 look steady to slightly lower vs. this morning (*) as follows: Jan'25 steady at -2.1bp, Mar'25 -11.7bp (-13.7bp), May'25 -16.0bp (-18.8bp), Jun'25 -23.4bp (-25.3bp).
  • Little reaction to a flurry of mixed data: November posted improved home sales figures compared with a soft October, but revised New home sales came in roughly as expected at 664k on a seasonally-adjusted annualized rate, up from 627k prior (upwardly revised from 610k), following on from data showing a 4.8% M/M increase in existing home sales in November to the highest level since March at 4.15M.
  • Headline durable goods orders figure of -1.1% M/M, the "miss" vs -0.3% expected was offset by an upward revision to the prior growth reading to 0.8% from 0.3%. Transportation equipment - a typically volatile category - led the decline, falling -2.9% M/M, with nondefense aircraft/parts down 7.0%.
  • Tsy $69B 2Y note auction (91282CME8) came out on the screws: 4.335% high yield vs. 4.335% WI; 2.73x bid-to-cover vs. 2.77x prior. Tuesday sees Tsy $28B 2Y FRN & $70B 5Y Note auctions.