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US TSYS: Weekend Polling Drives Sizeable Rally

US TSYS
USGlobalBulletMarketsFixed Income BulletsRegionNorth America
  • Treasuries have modestly extended the sizeable rally seen with the open, driven by Democrat presidential candidate Harris faring better in weekend polls, but with the result of Tuesday’s election still deemed extremely tight.
  • In particular, some refer to the Des Moines Register/Mediacom Iowa poll showing Harris with a 3pp lead over former president Trump, a potential bellwether for one of the seven swing states in nearby Wisconsin.
  • Political developments are likely in the driving seat although 3Y supply could see attention later on. Last week's 2Y saw a 0.8bp tail, as did last month's 3Y where the bid-to-cover although pulled back swiftly.
  • Cash yields are 5-11bp lower, with declines led by 20s, nearly all of which came with the London open after a Japan holiday.
  • 10Y yields at 4.278% have pulled back off Friday’s high of 4.384% at what had been the highest since early July.
  • 2s10s at 12.5bps (-5.5bps) helps pare some of the post-payrolls steepening flows seen.
  • TYZ4 at 110-17 (+15+) has kept to relatively narrow ranges ever since the Asia open on strong cumulative volumes above 500k.
  • It keeps to within Friday’s wide range seen at the payrolls report, with an initial high of 110-30 (first resistance) before sliding to a latest low of 109-27+ (first support). The bear cycle is still deemed in play with subsequent support seen at 109-15 (Jul 1 low).
  • Data: Factory orders/finalized durable goods for Sept (1000ET)
  • Note/bond issuance: US Tsy $58B 3Y Note auction - 91282CLX7 (1300ET)
  • Bill issuance: US Tsy $81B 13W, $72B 26W Bill auctions
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  • Treasuries have modestly extended the sizeable rally seen with the open, driven by Democrat presidential candidate Harris faring better in weekend polls, but with the result of Tuesday’s election still deemed extremely tight.
  • In particular, some refer to the Des Moines Register/Mediacom Iowa poll showing Harris with a 3pp lead over former president Trump, a potential bellwether for one of the seven swing states in nearby Wisconsin.
  • Political developments are likely in the driving seat although 3Y supply could see attention later on. Last week's 2Y saw a 0.8bp tail, as did last month's 3Y where the bid-to-cover although pulled back swiftly.
  • Cash yields are 5-11bp lower, with declines led by 20s, nearly all of which came with the London open after a Japan holiday.
  • 10Y yields at 4.278% have pulled back off Friday’s high of 4.384% at what had been the highest since early July.
  • 2s10s at 12.5bps (-5.5bps) helps pare some of the post-payrolls steepening flows seen.
  • TYZ4 at 110-17 (+15+) has kept to relatively narrow ranges ever since the Asia open on strong cumulative volumes above 500k.
  • It keeps to within Friday’s wide range seen at the payrolls report, with an initial high of 110-30 (first resistance) before sliding to a latest low of 109-27+ (first support). The bear cycle is still deemed in play with subsequent support seen at 109-15 (Jul 1 low).
  • Data: Factory orders/finalized durable goods for Sept (1000ET)
  • Note/bond issuance: US Tsy $58B 3Y Note auction - 91282CLX7 (1300ET)
  • Bill issuance: US Tsy $81B 13W, $72B 26W Bill auctions