US TSYS: Stronger Than Expected Data Pushed Yields Higher, FOMC Later This Week

TYH4 is trading at 111-06+, + 05+ from NY closing levels. We spiked higher in early trade (high of 111-10+), but there was now follow through. Spillover from higher oil prices will be a focus, along with broader risk trends, after attack on Russian Oil tanker in the Red Sea, late Friday and the weekend attack on US soldiers in Jordan near the border with Syria.

To recap, US Treasuries finished on Friday weaker, however slightly off the lows of the day ending the week at 111-06 vs lows of 111-00, Cash yields finished 2-6bps higher. Curves bear flattened on the day: 2s10s -3.150 at -21.048 vs. -17.415 high.

• Busy session to end the week with Tsys extending lows after PCE and Personal Spending data. Inflation data was close to expected, while spending firmer than forecast.
• Tsys extended lows yet again after higher than expected Pending Home Sales: a whopping 8.3% m/m increase vs. 2.0% est.
• Looking ahead this week: focus is on the FOMC policy announcement on Wednesday, followed by employment data for January on Friday. Treasury’s Quarterly Refunding process for the Feb-Apr quarter also begins with borrowing estimates released on Mon Jan 29 (0830ET), followed by the refunding announcement itself on Wed Jan 31 (also 0830ET)