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What to Watch: Pre-CPI Positioning, Two-Step Gov Funding Resolution

US TSYS
  • Treasury futures are trading mixed at the moment, 2s-10s see-sawing near late overnight highs, 30Y Bond lagging. Modest overnight volumes (TYZ3<280k) as participants ply the sidelines ahead of Tuesday's CPI data for October.
  • Limited economic data today with NY Fed 1-Yr Inflation Expectations at 1100ET, followed by Monthly Budget Statement at 1400ET.
  • Early Fed speak unlikely to move markets as Fed Gov Cook makes opening remarks at a machine learning conference at 0850ET (text, but no Q&A).
  • US Treasury supply limited to bills this week, $75B 13W and $68B 26W bill auctions kicks things off at 1130ET.
  • Headline watching: House Speaker Johnson proposed a two-step funding package Saturday in order to avoid partial government shutdown this Friday.
    • Two step continuing resolution proposal: extends government funding for some agencies and programs until January 19 and continuing funding for others until February 2.
    • Punchbowl News write the "chances of a shutdown are low, but this week will be full of drama between the two parties and two chambers — plus the White House — over how to deal with this situation."

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