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US TSYS: Sizeable Flattening; Final PCE Input and Harris Eyed Tomorrow

US TSYS
USGlobalBulletMarketsFixed Income BulletsRegionNorth America
  • Treasuries have flattened through the session as the front end pared earlier gains seen on the Empire mfg miss that had more robust details plus spillover from a soft Canadian CPI print.
  • SF Fed Daly’s (’24 voter) comments have also possibly supported the move (with some debate over “gradual doesn’t mean as much as you might think” amidst uncertainty) whilst former President Trump saying tariff is the most beautiful word came after the move but certainly doesn’t hinder it.
  • Cash yields are 0.5bp higher (2s) to 7.6bp lower (30s) than Friday’s close after yesterday’s holiday.
  • 2s10s has slipped to 8.7bps (-6bps) but remains broadly within ranges of close to 0-24bps seen over the past month.
  • TYZ4 at 112-11+ (+16) is off earlier highs of 112-15. It remains below resistance at 112-21 (Oct 9 high) and doesn’t alter the bearish theme with support seen at 111-22 (Oct 10 low).
  • Still to come today, Kugler (1300ET) and Bostic (1900ET) in moderated discussions, Bostic (’24) more likely to touch upon mon pol but having already spoken since both payrolls and CPI this month.
  • Near-term Fed Funds futures imply a similar initial rate path to early this session, with 22.5bp of cuts for Nov and a cumulative 45bp for Dec.
  • Tomorrow meanwhile sees international prices for the final input to core PCE estimates (currently tracking close to 0.25% M/M for release on Oct 31) and VP Harris’ interview on Fox. 
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  • Treasuries have flattened through the session as the front end pared earlier gains seen on the Empire mfg miss that had more robust details plus spillover from a soft Canadian CPI print.
  • SF Fed Daly’s (’24 voter) comments have also possibly supported the move (with some debate over “gradual doesn’t mean as much as you might think” amidst uncertainty) whilst former President Trump saying tariff is the most beautiful word came after the move but certainly doesn’t hinder it.
  • Cash yields are 0.5bp higher (2s) to 7.6bp lower (30s) than Friday’s close after yesterday’s holiday.
  • 2s10s has slipped to 8.7bps (-6bps) but remains broadly within ranges of close to 0-24bps seen over the past month.
  • TYZ4 at 112-11+ (+16) is off earlier highs of 112-15. It remains below resistance at 112-21 (Oct 9 high) and doesn’t alter the bearish theme with support seen at 111-22 (Oct 10 low).
  • Still to come today, Kugler (1300ET) and Bostic (1900ET) in moderated discussions, Bostic (’24) more likely to touch upon mon pol but having already spoken since both payrolls and CPI this month.
  • Near-term Fed Funds futures imply a similar initial rate path to early this session, with 22.5bp of cuts for Nov and a cumulative 45bp for Dec.
  • Tomorrow meanwhile sees international prices for the final input to core PCE estimates (currently tracking close to 0.25% M/M for release on Oct 31) and VP Harris’ interview on Fox.