US TSYS/SUPPLY: Soft Auctions Amid First 6-Week Benchmark Sale
Feb-18 19:07
We don't usually cover t-bill auctions in any depth, but today's sales were unusual:
- The 52-week bill bid-to-cover was the lowest since September 2024 (3.03x); the 26-week saw its lowest since March 2024.
- Another curiosity: the percentage allotted at high was the lowest for years for both the 13-week (8.5%, lowest since Oct 2024 which was 15 auctions ago) and 52-week (6.5%, lowest since Nov 2023 and 2nd lowest since October 2020).
- Meanwhile, for the first time in an auction cycle, Treasury has made the 6-week bill a "benchmark" bill - joining the other major bills (eg 4- and 8-week) with regularly scheduled settlement and maturity cycles.
- Previously it was just technically an ad hoc cash management bill (CMB) - the transition to benchmark status was announced in May 2024. Recall that Treasury made the 4-month bill a benchmark in October 2022.
- Treasury began regular weekly issuance of the 6-week bill coming out of the resolution of the debt limit impasse in June 2023, and it was the only regularly issued CMB.
- The inaugural benchmark sale saw a 2.49x bid/cover on a high yield of 4.27% - the yield was typical of recent 42-day CMB sales but the bid-cover was on the low side (longer-term average has been closer to 3.00x).
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EURUSD TECHS: Trend Signals Still Bearish
Jan-19 19:02
- RES 4: 1.0630 High Dec 06
- RES 3: 1.0513 50-day EMA
- RES 2: 1.0437/58 High Jan 6 / High Dec 30
- RES 1: 1.0345/54 20-day EMA / High Jan 15
- PRICE: 1.0282 @ 19:12 GMT Jan 17
- SUP 1: 1.0178 Low Jan 13 and the bear trigger
- SUP 2: 1.0138 1.764 proj of the Sep 25 - Oct 23 - Nov 5 price swing
- SUP 3: 1.0122 2.0% 10-dma envelope
- SUP 4: 1.0031 2.000 proj of the Sep 25 - Oct 23 - Nov 5 price swing
The trend condition in EURUSD is unchanged, it remains bearish and last week’s recovery appears corrective. Recent weakness resulted in a print below 1.0226, the Jan 2 low. The breach confirms a resumption of the downtrend and maintains the bearish price sequence of lower lows and lower highs. Sights are on 1.0138 next, a Fibonacci projection. Resistance to watch is 1.0437, the Jan 6 high. Initial resistance is at 1.0345, the 20-day EMA.
MNI: US TSY TICS NET FLOWS IN NOV +$159.9B
Jan-17 21:00
- MNI: US TSY TICS NET FLOWS IN NOV +$159.9B
- US TSY TICS NET L-T FLOWS IN NOV +$79.0B
US TSYS: Tsy Curves Twist Flatter, Heavy Short End Sales Ahead Inauguration
Jan-17 20:10
- Treasuries look to finish mixed Friday, well off early session highs with heavy short end selling weighing across the strip while curves twisted flatter (2s10s -4.357 at 33.679, 5s30s -2.657 at 43.037).
- Massive -46k Mar'25 2Y futures sale triggered a broad based reversal by midmorning, while morning headlines that incoming President Trump held a call with China President Xi elevated volatility. Descriptions of a positive tone for China/US relations provided a boost for the Chinese Yuan.
- A surprise $10B 5-tranche debt issuance from Bank of America contributed to selling in rates.
- Generally positive data: Industrial production surprisingly jumped 0.9% M/M (cons 0.3) in Dec after an upward revised 0.2% M/M (initial -0.1%). Utilities may have helped with their 2.1% M/M increase (strongest since May) but manufacturing production was also stronger than expected with 0.6% M/M (cons 0.2%) after an upward revised 0.4% M/M (initial 0.2%).
- Building permits were a little higher than expected in December at 1483k (cons 1460k) for little change from 1493k in Nov. Housing starts meanwhile, which are more prone to weather disruption, surprisingly jumped to 1499k (cons 1327k) after 1294k in Nov.
- Reminder, the Federal Reserve enters their policy Blackout at midnight tonight through January 30.
- Corporate earnings pick up in earnest next week, headliners expected to announce next Tuesday include KeyCorp, DR Horton Inc, Charles Schwab, Prologis Inc and 3M Co before the market opens, Fifth Third Bancorp, Netflix Inc, Interactive Brokers, United Airlines, Seagate Technology and Capital One Financial after the market closes.
