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US TSYS: Low Volumes Ahead Of July PCE Report

US TSYS
  • Treasuries have seen a modest twist flattening with 2s nudging a little towards yesterday’s lows but the long end slowly paring losses.
  • Cash yields are 0.5bp higher (2s) to 1.5bp lower (30s) on the day, with 10s at 3.852% off yesterday’s 3.886% which marked the highest in almost two weeks.
  • 2s10s has dipped to -4.6bps (-1.6bps) off yesterday’s high of -1.1bps. Recall it briefly disinverted in global risk-off fallout the Monday after last month’s payrolls report.
  • TYZ4 is at 113-30 (+02) having kept to a particularly narrow range of 113-27 to 113-30+ on low volumes of 220k. The bull cycle remains in place with resistance seen at 114-19+ (Aug 21 high).
  • Today’s firm focus is on monthly PCE for July. Yesterday’s Q2 revisions showed surprisingly strong consumption and softer core PCE inflation, with the distribution of these revisions through the quarter likely helping shape market reaction. See the MNI Preview here.  
  • Data: PCE Jul (0830ET), MNI Chicago PMI Aug (0945ET), U.Mich consumer survey Aug final (1000ET)
  • Fedspeak: None scheduled 

 

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