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What to Watch: Rate Rally, No Pushback From Fed Now

US TSYS
  • Decent volumes this morning, TYH4 over 500k already as rates trade firmer (TYH4 111-19.5, +15.5). Risk-on tone with S&P eminis making new contract highs (ESH4 4890.5) as markets recover some ground lost to last week's pushback from the Fed regarding projected rate cut pricing through mid-2024.
  • Fed entered blackout regarding monetary policy late Friday (through February 1, day after the first policy annc for 2024). The Bank of Japan kicks off the latest central Bank policy annc cycle sometime after 2130ET tonight, BoJ Ueda presser follows appr 4 hours later.
  • Quiet start to the new week for data with Leading Index at 1000ET. Main focus on estimate of Q4 GDP released Thursday, followed by consumer spending and PCE deflators on Friday.
  • This week's Treasury coupon supply starts tomorrow with $60B 2Y Notes (91282CJV4), $61B 5Y Notes (91282JW2) and $28B 2Y FRN on Wednesday, $41B 7Y Notes (91282CJX0) on Thursday.
  • Corporate earnings resume: a lot of big names on the schedule: GE, JNJ, Procter & Gamble, 3M, Lockheed Martin, Verizon, Netflix and Texas Instruments tomorrow.

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