while we slept
Good morning.
… here is a snapshot of UST rates, prices and moves as of 725a…
… And HERE is what other shops saying behind the overnight price action …
WHILE YOU SLEPT
Treasuries are modestly higher with the belly outperforming the wings and UK and German debt markets ahead of the ECB and US data. DXY is lower (-0.2%) while front WTI futures are too (-1.0%). Asian stocks were mostly higher, EU and UK share markets are mostly/modestly higher too while ES futures are sharply unchanged here at 7am. Our overnight US rates flows saw Treasuries open Asian trading with a bid, following Aussie bonds higher after their jobs disappointment (see above). Real$ bought intermediates with high broker volumes in the belly evident too. However, overnight Treasury volume was, despite the Asian activity, pretty subdued overall at just ~65% of average.… zoom out a bit to look at the weekly chart of 2's in our next attachment. We find weekly signals are good at anticipating or pacing trend moves in the 1mo-4mo timeframe. In this context, weekly momentum has been 'oversold' all year and it remains oversold today- with no new bull oscillator signal evident yet despite the pretty sharp 3-4 day rally
For somewhat MORE, BMOs morning thoughts, “Spending Problem?”
… Overnight Flows
The overnight price action took place on more modest volumes as the early close and long weekend approach with cash trading at 75% of the 10-day moving average. 5s were by far the most active issue with a 41% marketshare and 10s took second most with 23%. The front-end combined for a fairly in line 23% with 2s and 3s taking 11% and 12%, respectively. 7s garnered 9%, 20s claimed just 1% and the long bond rounded out the curve with a 4% allocation. Flow wise, we saw buying in 2s and modest selling in the long-end.
… and for some MORE of the news you can use, head TO Harkster.com … Knowledge without the noise (and if its ALL the noise and links you like, Finviz).
A holiday-shortened day and week coming to a close here in the bond markets @ 2pm only AFTER some funDUHmental data
Initial Claims and ReSale TALES (TREND visualized just above),
Concentrating on consumption:
US March Retail sales are due. The savings stockpile of many lower income households has been spent, which has meant that demand has had to normalize. The effects of the war in Ukraine, felt via higher commodity prices, may be evident in non-gasoline spending…
-UBS
I will be wrap up this brief note and offer a couple charts.
1stBOS offers a good look at 5y5y fwd, WEEKLY as their chart of the day
Chart of the Day: We raised our objective for the US 5y5y Treasury Fwd Rate earlier this week after reaching and breaking above our prior objective at the “measured base objective”, the 38.2% retracement of the entire fall from 2010 and the long-term downtrend, which all coincided around 2.68%. We view this as a major breakout and look for a deeper rise, with the next important support at 3.00%, then the 50% retracement at 3.20%. Interestingly, the market has held up at higher levels, even as rates have fallen across the past two days, potentially as tentative signs of peaking inflation give markets more confidence about the longer-term growth outlook
They go on to talk of 10yy MONTHLY and a break ABOVE ‘secular support’ (2.645/66%) which should “open up a move to higher levels” » sell at resistance down nearer 2.56% and while yer at it, sell 5yy down near 2.53, too. Oh heck, why not just sell EVERYTHING into a rally. Long bonds down near 2.645% are for sale, it would appear and here’s MONTHLY look where they note,
30yr US Bond Yields are trying to break above secular support at 2.76/79%, which would reinforce the secular breakout in US 10s.
With important levels close, another fan fav chartOlogist … on rates,
KIMBLE: US Treasury Bond Yields Testing Trend-Change Inflection Point!
… Today we take a look at a chart 4-pack of the 2-year, 5-year, 10-year, and 30 year US treasury bond yields. And as we have done in the past we invert the charts. This flips the script and takes away some or our current bias.
So line (1), which is overhead resistance, is shown here on the “inverted” chart as support. Note that line (1) is a long-term trend line with major implications.
As tax time approaches, a quick pro-tip,
… THAT is all for now. Back TO the day job!!