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Yields Resume Climb Ahead Midweek GDP/PCE Metrics

US TSYS
  • Tsys holding near session lows after the bell, extending session lows in the second half after briefly posting gains on decent $42B 7Y note auction (91282CKC4) stop: 4.327% high yield vs. 4.330% WI; 2.58x bid-to-cover vs. 2.57x last month.
  • Additional factors helping rise in Tsy yields (10Y +.0296 at 4.3091%), month end extensions (0.11%), and stocks making a late session comeback (SPX Eminis at 5090.25).
  • Fast two-way trade reported after lower than expected Durable Goods Orders (-6.1% vs. -5.0% est); ex-Trans (-0.3% vs. 0.2% est, prior down revised to -0.1% from 0.5%). Cap Goods Orders Nondef Ex Air in line with 0.1% est while prior was down-revised to -0.6% from 0.2%.
  • Additional data: FHFA house prices increased by less than expected in Dec, 0.1% M/M (cons 0.3) after 0.31% M/M, its softest monthly print since Jan’23. Conf. Board consumer confidence saw a sizeable miss in February, falling to 106.7 (cons 115.0) after a downward revised 110.9 (initial 114.8).
  • Mar'24 10Y futures currently -2 at 109-17.5 vs. 109-15 low. The trend direction in Treasuries is unchanged and remains down with the contract trading closer to its recent lows. Price has pierced 109-17, 50.0% of the Oct - Dec bull cycle. A clear break of this retracement would strengthen the bearish condition and signal scope for an extension towards 108-19+, the 61.8% Fibonacci level. On the upside, initial firm resistance is seen at 110-24+, the 50-day EMA.
  • Look ahead, Wednesday data calendar includes GDP, PCE, Wholesale/Retail Inv, Fed Speak.
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