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US TSYS: Modest Bid As China Stimulus Doesn’t Meet Some Lofty Expectations

US TSYS
USGlobalBulletMarketsFixed Income BulletsRegionNorth America
  • Treasuries trade modestly firmer, with a tailwind from China unveiling a 10tn yuan ($1.4tn) program to primarily support local governments that disappointed some expecting additional more consumption-focused aspects.
  • EGBs outperform Treasuries owing to their greater sensitivity to China growth.
  • Today’s docket is light and we expect the U.Mich consumer survey to largely be discounted with a survey window of Oct 22-Nov 4 stopping just shy of the Nov 5 presidential election, barring any particularly large surprises.
  • Cash yields are 2-3bps lower, with largest declines seen in 3s.
  • 2s10s at 13.5bps (+0.5bp) is within recent ranges.
  • TYZ4 trades at 110-13+ (+ 07+) on strong cumulative volumes of 440k, off an earlier high of 110-16+.
  • The rally extends yesterday’s bounce and is deemed corrective with resistance at 110-21+ (Nov 6 high). A resumption of the bear cycle would see support at the bear trigger of 109-07 (Nov 6 low).
  • Data: U.Mich consumer survey Nov prelim (1000ET)
  • Fedspeak: Bowman speaks on banking (1100ET) – she can’t touch upon mon pol as the FOMC blackout ends tonight at midnight ET
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  • Treasuries trade modestly firmer, with a tailwind from China unveiling a 10tn yuan ($1.4tn) program to primarily support local governments that disappointed some expecting additional more consumption-focused aspects.
  • EGBs outperform Treasuries owing to their greater sensitivity to China growth.
  • Today’s docket is light and we expect the U.Mich consumer survey to largely be discounted with a survey window of Oct 22-Nov 4 stopping just shy of the Nov 5 presidential election, barring any particularly large surprises.
  • Cash yields are 2-3bps lower, with largest declines seen in 3s.
  • 2s10s at 13.5bps (+0.5bp) is within recent ranges.
  • TYZ4 trades at 110-13+ (+ 07+) on strong cumulative volumes of 440k, off an earlier high of 110-16+.
  • The rally extends yesterday’s bounce and is deemed corrective with resistance at 110-21+ (Nov 6 high). A resumption of the bear cycle would see support at the bear trigger of 109-07 (Nov 6 low).
  • Data: U.Mich consumer survey Nov prelim (1000ET)
  • Fedspeak: Bowman speaks on banking (1100ET) – she can’t touch upon mon pol as the FOMC blackout ends tonight at midnight ET