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US TSYS: Bear Steeper Ahead Of An Important Session

US TSYS
USGlobalBulletMarketsFixed Income BulletsRegionNorth America
  • Treasuries have pared some of yesterday’s firming amidst low volumes ahead of a notable session, only modestly outperforming EGBs.  
  • Bank earnings are in focus early on, with JPMorgan and Wells Fargo to report shortly. Focus is then firmly on inflation matters (PPI before U.Mich expectations) before some potentially hawkish Fedspeak that could draw headlines on any November skip talk.  
  • PPI will be important after yesterday's CPI beat saw large contributions from some CPI-specific categories. We currently track analyst unrounded core PCE estimates at around 0.23% M/M.
  • Cash yields are 2-3bp higher on the day, led by the long end.
  • 2s10s at 11.6bps (+0.6bp) hold yesterday’s CPI/jobless claims driven steepening but is within last month’s ytd highs of 24bps.
  • TYZ4 has seen session lows of 112-02 on soft cumulative volumes of 225k. It remains within yesterday’s wide range, with volatility around data sparking a low of 111-22 for fresh support after which lies 111-14 (50% retrace of the Apr-Sep bull cycle).
  • Data: PPI Sep (0830ET), U.Mich consumer survey Oct prelim (1000ET)
  • Fedspeak: Goolsbee opening remarks (0945ET), Logan panel discussion (1045ET), Bowman (1310ET, text + Q&A) - see separate STIR bullet. 
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  • Treasuries have pared some of yesterday’s firming amidst low volumes ahead of a notable session, only modestly outperforming EGBs.  
  • Bank earnings are in focus early on, with JPMorgan and Wells Fargo to report shortly. Focus is then firmly on inflation matters (PPI before U.Mich expectations) before some potentially hawkish Fedspeak that could draw headlines on any November skip talk.  
  • PPI will be important after yesterday's CPI beat saw large contributions from some CPI-specific categories. We currently track analyst unrounded core PCE estimates at around 0.23% M/M.
  • Cash yields are 2-3bp higher on the day, led by the long end.
  • 2s10s at 11.6bps (+0.6bp) hold yesterday’s CPI/jobless claims driven steepening but is within last month’s ytd highs of 24bps.
  • TYZ4 has seen session lows of 112-02 on soft cumulative volumes of 225k. It remains within yesterday’s wide range, with volatility around data sparking a low of 111-22 for fresh support after which lies 111-14 (50% retrace of the Apr-Sep bull cycle).
  • Data: PPI Sep (0830ET), U.Mich consumer survey Oct prelim (1000ET)
  • Fedspeak: Goolsbee opening remarks (0945ET), Logan panel discussion (1045ET), Bowman (1310ET, text + Q&A) - see separate STIR bullet.