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US TSYS: Treasuries Outperform European Sell-Off Ahead Of Payrolls

US TSYS
USGlobalBulletMarketsFixed Income BulletsRegionNorth America
  • Treasuries have pushed through yesterday’s lows through 2-10Y benchmark tenors and TY has breached support, but do so lagging a sharper sell-off in EGBs and Gilts in particular.
  • This outperformance is likely some reluctance ahead of today’s payrolls report. MNI Preview: https://media.marketnews.com/USNFP_Oct2024_Preview1_bb6bbc0e4e.pdf
  • Cash yields sits 0.8-1.8bp higher across the curve, with 3s leading the increase helped by WTI futures extending yesterday’s strong gains on scope for Israel strikes on Iranian oil facilities.
  • 2s10s is little changed at 14bps as it remains off ytd highs of 24bps.
  • TYZ4 has breached support in an extension of its bear leg, at fresh lows of 113-26+ (- 02+) on reasonable volumes of 340k.
  • It’s below support at 113-29+ (50-day EMA) with a more pronounced break here potentially offering scope for a run towards a key support at 113-12 (Sep 3 low). In the event of a soft payrolls report, resistance is seen at 114-18 (20-day EMA).
  • There was decent downside option flow in mid-London trade, with TYZ4 112.50/111.50ps, bought for 15 in 10k and TYZ4 112.00/111.00ps, bought for 12 in 10k.
  • Data: Payrolls Sep (0830ET)
  • Fedspeak: Williams (0900ET), Goolsbee on media round (1000ET, 1030ET, 1600ET)
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  • Treasuries have pushed through yesterday’s lows through 2-10Y benchmark tenors and TY has breached support, but do so lagging a sharper sell-off in EGBs and Gilts in particular.
  • This outperformance is likely some reluctance ahead of today’s payrolls report. MNI Preview: https://media.marketnews.com/USNFP_Oct2024_Preview1_bb6bbc0e4e.pdf
  • Cash yields sits 0.8-1.8bp higher across the curve, with 3s leading the increase helped by WTI futures extending yesterday’s strong gains on scope for Israel strikes on Iranian oil facilities.
  • 2s10s is little changed at 14bps as it remains off ytd highs of 24bps.
  • TYZ4 has breached support in an extension of its bear leg, at fresh lows of 113-26+ (- 02+) on reasonable volumes of 340k.
  • It’s below support at 113-29+ (50-day EMA) with a more pronounced break here potentially offering scope for a run towards a key support at 113-12 (Sep 3 low). In the event of a soft payrolls report, resistance is seen at 114-18 (20-day EMA).
  • There was decent downside option flow in mid-London trade, with TYZ4 112.50/111.50ps, bought for 15 in 10k and TYZ4 112.00/111.00ps, bought for 12 in 10k.
  • Data: Payrolls Sep (0830ET)
  • Fedspeak: Williams (0900ET), Goolsbee on media round (1000ET, 1030ET, 1600ET)