US TSYS: EGBs Help Drive Further Gains But Breakevens Still Elevated
Feb-21 11:51
- Treasuries have pulled back from highs seen briefly after a surprisingly soft flash French services PMI, although remain firmer on the day as they underperform EGBs along with a tailwind from lower oil prices.
- Today’s data focus is on flash US PMIs and less so existing home sales, whilst the partisan distortions seen in the U.Mich consumer survey had muddied recent results.
- Cash yields are 1-2.5bp lower, with declines led by the long end.
- The modest flattening pushes 2s10s to 23bps (-0.7bp) but it keeps to ranges seen over the past two weeks.
- Early trade has seen the decline in yields driven by real yields, whilst the 5Y breakeven remains of note with 2.70% one its highest levels since Mar 2023.
- TYH5 trades at 109-07 (+ 01+) off an earlier high of 109-11+ seen on the French PMI headlines, whilst cumulative volumes approaching 675k are heavily boosted by quarterly rolls.
- Further gains would expose key resistance at 110-00 (Feb 7 high and bull trigger) but moving average studies highlight a dominant downtrend with support seen at 108-04 (Feb 12 low) before 108-00 (Jan 16 low).
- Data: S&P flash PMIs Feb (0945ET), Existing home sales Jan (1000ET), U.Mich Feb final (1000ET)
- Fedspeak: VC Jefferson on central bank communications w/ opening remarks from Daly (1130ET) – see STIR bullet.
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Historical bullets
PIPELINE: Corporate Bond Issuance Roundup: KDB 2Pt on Tap
Jan-22 11:47
- Date $MM Issuer (Priced *, Launch #)
- 01/22 $Benchmark KDB 3Y SOFR+58a, 5Y SOFR+77a
- $13.25B Priced Tuesday
- 01/21 $8.5B GS $2.1B 6NC5 +82, $400M 6NC5+108, $3B 11NC10 +97, $3B 31NC30 +92
- 01/21 $4.25B RBC $1.55B 4NC3 +65, $600M 4NC3 SOFR+83, $1.8B 6NC5 +77, $300M 6NC5 SOFR+103
- 01/21 $500M Bank of NZ 10NC5 +130
OPTIONS: Expiries for Jan22 NY cut 1000ET (Source DTCC)
Jan-22 11:46
- EUR/USD: $1.0345-50(E3.1bln), $1.0375(E826mln), $1.0400(E1.0bln), $1.0500(E1.1bln)
- USD/JPY: Y154.50-60($1.1bln), Y155.50($1.3bln), Y156.45($555mln)
- AUD/USD: $0.6210(A$2.1bln)
- USD/CAD: C$1.4500($829mln)
BTP: Block trade
Jan-22 11:42
BTP Block trade, suggest seller:
- IKH5 ~1.2k at 119.55.
