(curve MIXED / flatter on light volumes)while WE slept; a 'Long-Term Strategist'; a couple / few charts
Good morning … Democrat John Fetterman tweets “It’s official. I will be the next US Senator from Pennsylvania” as NBC news projects the seat for the Democrats after 90% of votes counted showed him ahead of Trump’s candidate Dr. Oz 49.4% to 48.1% … China Inflation, PPI fell by 1.3% yoy in October the first decline since Dec 2020, CPI rose 2.1% yoy vs f/c 2.4% …
AND this months refunding process CONTINUES with today’s 10yr auction … here’s a look at 10yy over the (somewhat)longer-term
… here is a snapshot OF USTs as of 705a:
… HERE is what another shop says be behind the price action overnight…
… WHILE YOU SLEPT
Treasuries are mixed with the curve pivoting flatter around a little-changed 10yr benchmark. DXY is higher (+0.15%) while front WTI futures are lower (-0.9%). Asian stocks were mixed, EU and UK share markets are mixed while ES futures are little changed here at 6:50am. Our overnight US rates flows saw little of significance during Asian hours as the US election results were rolling in. My desk colleagues did note a theme of real$ selling intermediates on 'fly and in our attachments we show why such flow makes sense. Overnight Treasury volume was about 90% of average overall with 2's (114%), 5's (123%) and 20's (162%) seeing relatively high average turnover overnight.… As for curvature, the 2s5s10s Treasury 'fly has once again probed its summer range lows near -20bp, as illustrated. You can see in the lower panel that short-term (daily) momentum is deeply 'oversold' as 2s5s10s hits support near -20. The idea here is that pro-belly trades may be locally over-subscribed right now or that this may be a choice area to clip some gains in said structures...
… and for some MORE of the news you can use » IGMs Press Picks for today (9 NOV) to help weed thru the noise (some of which can be found over here at Finviz).
Now as far as a few items from Global Wall Street’s inbox which caught MY eyes,
ABNAmro is: Changing our Fed call
We now expect the Fed to aim for a higher peak in rates, but this is likely to mean even steeper rate cuts later in 2023, once conditions allow.
From a changed FED call to a Long-Term Strategist (Jan Loeys)
Where are we in Regime Change? Macro volatility, deglobalization, and secular rise in yields
AND from the (1stBOS)CHARTS department,
The uptrend in the USD continues to lose significant momentum from the upper end of what we see as its “typical” extreme, with weekly MACD having crossed lower. We are therefore highly alert to the formation of a top, seen confirmed by a close below key support at 1316/14 for the BBG DXY. Please note the Credit Suisse House View is neutral the USD…
… The next short-term move for US 10yr Bond Yields will be highly dependent on CPI, however if we are right that the USD is about to top, that would suggest a CPI miss and a move lower. Medium-term, we retain our neutral duration stance.
AND THIS ONE from Chris Kimble
… THAT is all for now. Off to the day job…