Yields Open Steady, FOMC Cautious On Cuts

Treasury futures opened near Wednesday lows, as markets digest the January FOMC minutes, cash yields look poised to open largely inline with closing levels. While Nvidia earnings were out post the close beating expectations and pushing equity futures higher.

• Mar'24 10Y futures currently 109-18+, just above Wednesday lows of 109-18. Initial technical support holds at 109-17/16+ (50.0% of Oct 19 - Dec 27 climb / Low Feb 14), a break here will open up 109-05+ Low Nov 28, while to the upside initial technical resistance sits at 110-17.5 (Feb 15 high).
• Yield curves were slightly flatter on Wednesday, 2-6bps higher. As cash trading gets underway in Asia, curves are largely unchanged 2Y yield is -0.2bps lower at 4.664%, the 10Y yield is +0.6bp higher at 4.325%, while the 2s10s +0.592 at -34.360.
• WSJ's Nick Timiraos wrote earlier about the Fed minutes where he mentioned that Federal Reserve officials, in the January meeting, expressed concerns about cutting interest rates too quickly and allowing inflation pressures to persist. Despite prior expectations of rate cuts, economic data showing job growth and higher-than-expected inflation has shifted the outlook, with the Fed now more cautious about immediate rate reductions. (WSJ)
• Looking ahead: Chicago Fed Nat Activity Index, Jobless Claims, S&P Global US PMI & Existing Home Sales