US TSYS: TY Testing Resistance, Refunding and ISM Services Headline The Docket
* Treasuries have extended yesterday's rally that received a helping hand from lower-than-expected...
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
STIR: OI Points To Short Setting In Most SOFR Futures On Friday
OI data suggests net short setting dominated through the SOFR greens on Friday, with long cover then more prominent in the blues.
| 03-Jan-25 | 02-Jan-25 | Daily OI Change |
| Daily OI Change In Packs |
SFRZ4 | 1,121,523 | 1,123,852 | -2,329 | Whites | +26,509 |
SFRH5 | 1,128,024 | 1,106,984 | +21,040 | Reds | +40,855 |
SFRM5 | 1,024,515 | 1,015,549 | +8,966 | Greens | +7,985 |
SFRU5 | 813,715 | 814,883 | -1,168 | Blues | -7,320 |
SFRZ5 | 907,468 | 892,431 | +15,037 |
|
|
SFRH6 | 590,999 | 574,992 | +16,007 |
|
|
SFRM6 | 648,683 | 641,261 | +7,422 |
|
|
SFRU6 | 635,079 | 632,690 | +2,389 |
|
|
SFRZ6 | 723,428 | 720,463 | +2,965 |
|
|
SFRH7 | 463,226 | 461,114 | +2,112 |
|
|
SFRM7 | 376,507 | 377,628 | -1,121 |
|
|
SFRU7 | 275,908 | 271,879 | +4,029 |
|
|
SFRZ7 | 292,163 | 297,059 | -4,896 |
|
|
SFRH8 | 228,241 | 228,109 | +132 |
|
|
SFRM8 | 158,795 | 160,621 | -1,826 |
|
|
SFRU8 | 114,583 | 115,313 | -730 |
|
|
US TSYS: Richer After Belated Reaction To More Targeted Trump Tariff Story
- Treasuries sit firmer across the curve having more than reversed the gap lower at the open. They were much slower to react than FX markets to the Washington Post flagging Trump aides readying a universal tariff plan but one that is much more targeted than some of Trump’s campaign pledges.
- Today’s docket is highlighted by Fed Gov. Cook, final PMIs and the 3Y note auction offering the first coupon issuance of 2025.
- Cash yields are 0.2-2.3bp lower on the day, led by 2s.
- 2s10s at 33.4bp (+1.5bp) trades close to recent highs of 35bps.
- TYH5 trades at 108-22+ (+02) on reasonable volumes of 405k, having lifted off overnight lows of 108-12 but with trend conditions still bearish. Support remains at 108-06+ (Dec 26 low) whilst the session’s high of 108-24 remained firmly below resistance at 109-10+ (20-day EMA).
- Fed Funds futures cumulative cuts from 4.33% effective: 2bp Jan, 12bp Mar, 17bp May and 26bp Jun.
- Data: Serv/comp PMI Dec final (0945ET), Factory orders Nov (1000ET)
- Fedspeak: Confined to Gov. Cook (permanent voter) on the economic outlook and financial stability at 0915ET (text + Q&A). She last spoke Nov 20, with two-sided comments that the Fed could pause if inflation progress slows and job market is solid but the Fed could also cut more quickly if the job market weakens substantially. Her base case is to lower rates over time until near a neutral setting.
- Note/bond issuance: US Tsy $58B 3Y note auction - 91282CMF5 (1300ET)
- Bill issuance: US Tsy $84B 13W and $72B 26W bill auctions (1130ET)
EGB SYNDICATION: New 10-Year OLO: Mandate
"The Kingdom of Belgium (rated Aa3/AA/AA-; outlook negative/stable/negative) intends to issue a new EURO syndicated benchmark bond maturing 22 June 2035 (OLO 103) in the near future, subject to market conditions."
- "The Kingdom has mandated BNP Paribas Fortis, Crédit Agricole CIB, HSBC, J.P. Morgan and Morgan Stanley as joint bookrunners" (all details as per Bloomberg)
- We had pencilled in a 10-year Belgium syndication in our EGB Issuance, Redemption and Cash Flow Matrix publication for this week, with a size estimate of E7.0bln in line with what we have seen in the past two years with some upside risk.
