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US Treasury Futures Higher After Jobs Data, Powell's Policy Testimony

US TSYS


Treasury futures gained traction as markets continued to digest the text of Fed Chairman Powell's congressional testimony (as well as the down-revision to the prior JOLTS job openings from 9.026M to 8.889M). The focus remains on cutting interest rates "at some point this year," but not until there is more confidence that inflation will keep falling.

  • Jun'24 10Y futures touched lows of 111-02+ before US data, then pushed higher, tapping the initial resistance of 111-23. Futures retraced some of the move by the close, finishing the session up +10+ at 111-16. As trading gets underway in Asia futures are opening a touch higher up + 01 to 111-16+
  • Futures tapped initial technical resistance at 111-23 (High Mar 6) on Wednesday. The focus will be on whether a retest of that level is possible. A break above would open 111-27 (50% retracement of the Feb 1 - 23 bear leg). To the downside, levels to watch include 110-05+/109-25+ (Low Mar 1 / Low Feb 23 and bear trigger).
  • Treasury curves bull-flattened on Wednesday with yields 0-7bps lower, with the 2Y yield down -0.4bp to 4.554%, 10Y yield down -5.1bps, while the 2y10y reached new YTD lows down -4.619 at -45.369.
  • Fed's Kashkari spoke at a WSJ Event earlier. His statements suggest a cautious approach to monetary policy, with the base case indicating no further rate hikes. However, he acknowledges that if inflation becomes more entrenched, the Fed may prolong its current stance, and if inflation flares again, a rate hike could be justified.
  • Thursday's data calendar includes Weekly Claims, Unit Labor Cost, and day two of Chairman Powell's testimony.
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Treasury futures gained traction as markets continued to digest the text of Fed Chairman Powell's congressional testimony (as well as the down-revision to the prior JOLTS job openings from 9.026M to 8.889M). The focus remains on cutting interest rates "at some point this year," but not until there is more confidence that inflation will keep falling.

  • Jun'24 10Y futures touched lows of 111-02+ before US data, then pushed higher, tapping the initial resistance of 111-23. Futures retraced some of the move by the close, finishing the session up +10+ at 111-16. As trading gets underway in Asia futures are opening a touch higher up + 01 to 111-16+
  • Futures tapped initial technical resistance at 111-23 (High Mar 6) on Wednesday. The focus will be on whether a retest of that level is possible. A break above would open 111-27 (50% retracement of the Feb 1 - 23 bear leg). To the downside, levels to watch include 110-05+/109-25+ (Low Mar 1 / Low Feb 23 and bear trigger).
  • Treasury curves bull-flattened on Wednesday with yields 0-7bps lower, with the 2Y yield down -0.4bp to 4.554%, 10Y yield down -5.1bps, while the 2y10y reached new YTD lows down -4.619 at -45.369.
  • Fed's Kashkari spoke at a WSJ Event earlier. His statements suggest a cautious approach to monetary policy, with the base case indicating no further rate hikes. However, he acknowledges that if inflation becomes more entrenched, the Fed may prolong its current stance, and if inflation flares again, a rate hike could be justified.
  • Thursday's data calendar includes Weekly Claims, Unit Labor Cost, and day two of Chairman Powell's testimony.