Yields Lower Across The Curve, Fedspeak Pushes Back Against June Hike

TYU3 resumes trading at 114-12+, a decline of 2+ from NY closing levels. On Wednesday, it reached a peak of 114-20, coming close to the resistance level at the 20-day EMA of 114-29+. Beyond that lies the 50-day EMA at 115-07+. Volumes have soared.

• In a volatile session, cash tsys finished 3-7bp richer across major benchmarks, supported by weaker economic data, softer equity markets, and Fedspeak (Jefferson/Harker) pushing back against a June hike.
• The Wall Street Journal's Nick Timiraos writes: Federal Reserve officials signalled they are increasingly likely to hold interest rates steady at their June meeting before preparing to raise them again later this summer. The strategy would give officials more time to study the economic effects of the Fed’s 10 consecutive prior rate rises, as well as recent banking stress, by spacing out further increases.
• The lead-in from Europe was also supportive after German CPI declined from 7.6% y/y to 6.3% in May, surpassing expectations by 0.4ppts. Similar downside surprises were observed in Spanish and French CPI data.
• The only factor that pressured tsy yields was the unexpected increase in US job openings, which reached a three-month high. These positive figures contrast with other labour market indicators, which suggest a softening in conditions.