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Treasuries have extended an easing from highs seen after a strong 7Y auction marked a third solid auction for the front-loaded week. It’s likely positioning ahead of Thanksgiving although WTI futures lifting off lows have added some impetus.
TYH5 at 110-27+ (+11+) has seen a pick-up in volumes recently, moving away from post-auction highs of 111-01. The round 111-00 appears to have offered some light resistance, after which lies 111-03 (drawn from the 10Y yield at 4.2205%) before 111-14+ (50-day EMA).
Gains are considered corrective though, with support seen at 109-20 (Nov 20/21 low).
Cash yields are 4-6.5bp lower on the day, with declines led by 7s following the auction.
The day’s data deluge was mixed but ultimately quite close to consensus. Still, it offered a reminder of core PCE inflation remaining on track to overshoot median FOMC projections for Q4 whilst supercore PCE inflation stabilizes at rates still uncomfortably above the 2% target.
Fed Funds implied rates are little change since the data. Cumulative cuts from 4.58% effective: 16bp Dec, 22bp Jan, 35bp Mar and 52bp June.
Market operating hours over Thanksgiving:
Cash Tsys: Thursday Nov 28: closed, Friday Nov 29, shortened session closing at 14:00 NY/13:00 Chicago.
Tsy futures: Thursday Nov 28: goes into pre-open (early close, no settlement) at 13:00 NY/12:00 Chicago, Friday Nov 29: Early close at 13:15 NY/12:15 Chicago
Sign up now for free trial access to this content.
Please enter your details below.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.
Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
MNI (LONDON)
Treasuries have extended an easing from highs seen after a strong 7Y auction marked a third solid auction for the front-loaded week. It’s likely positioning ahead of Thanksgiving although WTI futures lifting off lows have added some impetus.
TYH5 at 110-27+ (+11+) has seen a pick-up in volumes recently, moving away from post-auction highs of 111-01. The round 111-00 appears to have offered some light resistance, after which lies 111-03 (drawn from the 10Y yield at 4.2205%) before 111-14+ (50-day EMA).
Gains are considered corrective though, with support seen at 109-20 (Nov 20/21 low).
Cash yields are 4-6.5bp lower on the day, with declines led by 7s following the auction.
The day’s data deluge was mixed but ultimately quite close to consensus. Still, it offered a reminder of core PCE inflation remaining on track to overshoot median FOMC projections for Q4 whilst supercore PCE inflation stabilizes at rates still uncomfortably above the 2% target.
Fed Funds implied rates are little change since the data. Cumulative cuts from 4.58% effective: 16bp Dec, 22bp Jan, 35bp Mar and 52bp June.
Market operating hours over Thanksgiving:
Cash Tsys: Thursday Nov 28: closed, Friday Nov 29, shortened session closing at 14:00 NY/13:00 Chicago.
Tsy futures: Thursday Nov 28: goes into pre-open (early close, no settlement) at 13:00 NY/12:00 Chicago, Friday Nov 29: Early close at 13:15 NY/12:15 Chicago
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