ISRAEL: Final Issues On Gaza Deal Resolved, Cabinet Meets Friday To Approve-Rpts
Aryeh Deri MK, leader of the Orthodox Shas party that sits as part of PM Benjamin Netanyahu's governing coalition, has said that all issues on the Gaza ceasefire-for-hostages deal have been resolved. Speaking at a party conference, Deri was recorded as saying "On the way here , I received a message that, thank God, all disputes have been resolved, even on the final points...The negotiations have been concluded, and they are now working on drafting everything before issuing an official announcement. [Prime Minister Benjamin] Netanyahu made one of the toughest decisions he has ever faced,"
- Comes as Barak Ravid at Axios posts on X: "American source tells me: The final disputes surrounding the hostage deal have been resolved."
- N12 reports that the Cabinet will meet on Friday 17 Jan to approve the deal.
- US Secretary of State Antony Blinken has said that he expects the deal to come into force from Sunday 19 Jan.
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US 10YR FUTURE TECHS: (H5) Bear Cycle Extends
- RES 4: 112-02 Low Oct 14
- RES 3: 111-24 38.2% retrace of the Sep 11 - Nov 15 bear leg
- RES 2: 111-06/111-20+ 50-day EMA / High 6 and the bull trigger
- RES 1: 110-19+ 20-day EMA
- PRICE: 109-29+ @ 16:41 GMT Dec 17
- SUP 1: 109-20 Low Nov 20/21
- SUP 2: 109-02+ Low Nov 15 and the bear trigger
- SUP 3: 109-00 Round number support
- SUP 4: 108-28 1.236 proj of the Oct 1 - 14 - 16 price swing
A bearish short-term theme in Treasury futures remains intact despite Tuesday’s bounce. It is still possible that the latest pullback is a correction. Initial resistance to watch is 110-19+, the 20-day EMA. A break would highlight an early bullish development. For bears, 109-22, 76.4% of the Nov 15 - Dec 6 upleg, has been pierced. A continuation lower would expose 109-02+, the Nov 15 low and key support.
FED: US TSY 42D AUCTION: HIGH RATE 4.270%; 90.24% AT HIGH
- US TSY 42D AUCTION: HIGH RATE 4.270%; 90.24% AT HIGH
- US TSY 42D BILL AUCTION: DEALERS TAKE 55.25% OF COMPETITIVES
- US TSY 42D BILL AUCTION: DIRECTS TAKE 6.25% OF COMPETITIVES
- US TSY 42D BILL AUCTION: INDIRECTS TAKE 38.51% OF COMPETITIVES
- US TSY 42D AUCTION: BID/COVER 2.59
US TSYS/SUPPLY: Preview 20Y Bond Auction
On the eve of the FOMC decision, Treasury sells $13B in 20-Year Bonds (CUSIP: 912810UF3) at 1300ET Tuesday, in the last long-duration auction of the year.
- The current 20Y when-issued yield of 4.66% is around 2bp below the prior auction (Nov 20) high yield of 4.68%, though there has been plenty of movement in the interim, with the current generic yield up 25bp from the early December lows after an extended sell-off.
- Sales of the 20Y have been "streaky": the six auctions between March and August saw either on-the-screws or trade-through results, but the last three have seen fairly wide tails including 3.1bp in the very weak November 20 auction (22.6% primary dealer takeup, just 2.34x bid/cover).
- 5-auction stats are below. The 5-auction average has seen 1.3bp tails, 2.53x bid-cover, and mixed takedowns (including 15% primary dealer / 70% indirect / 15% directs).
- There's been little evident correlation with 30Y sales in the same month, potentially a benefit today with the Dec 12 30Y re-open tailing by 1.2bp.
- From a valuation perspective, the curve is a marginally steeper vs a month ago. On the 10s20s30s fly, at 34.6bp, 20s are 3bp richer than pre-Nov auction, but fairly steady over the sell-off of the past few weeks.
| High yield | When-issued yield | Trade through (tail) | High - Median Spread | Bid-to-cover | Primary Dealer Percent | Indirect Percent | Direct Percent | Offering Amount | |
| 5 auction avg | 4.387% | 4.374% | -1.3 | 6.7 | 2.53 | 14.78% | 70.13% | 15.09% | 14.2 |
| 20-Nov-24 | 4.680% | 4.649% | -3.1 | 8.0 | 2.34 | 22.61% | 69.47% | 7.92% | 16 |
| 23-Oct-24 | 4.590% | 4.574% | -1.6 | 6.0 | 2.59 | 14.48% | 67.87% | 17.64% | 13 |
| 17-Sep-24 | 4.039% | 4.018% | -2.1 | 6.9 | 2.51 | 18.62% | 65.09% | 16.28% | 13 |
| 21-Aug-24 | 4.160% | 4.161% | 0.1 | 6.5 | 2.54 | 9.72% | 71.00% | 19.27% | 16 |
| 17-Jul-24 | 4.466% | 4.466% | 0.0 | 6.0 | 2.68 | 8.47% | 77.20% | 14.32% | 13 |
