US T-notes capped by Thursday’s high and potential double top

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OVERNIGHT TREASURIES

•US T-notes capped by Thursday’s high and potential double top
•Volume on low side at 90k contract by 09:55 GMT
•1.44% holds on May 2022s from early June
•2s/10s holds 121bp from early June as well
•10yr US/Germany holds 25bp resistance region ahead of trend at 30bp
•JPMorgan earnings awaited, Reuters EPS consensus USD0.78

MARKET BIAS

•The tactical bias is a buyer of dips in the new lower range especially now that supply was taken down so aggressively by real end users.
•Look for a range of 1.52% to 1.45% in 10s. The strategic bias is flat after covering a 100% position short from 2.57% at 2.58% in the auction for a 1 bps profit.
•The curve bias is flat but favors flatteners given 5 more Fed bond buybacks by month end

TECHNICAL OVERVIEW

DATA

•08:30 PPI (Jun) (mkt -0.5% m/m, +0.2% y/y; prev -1.0% m/m, +0.7% y/y)
•08:30 — Core PPI (Jun) (mkt +0.2% m/m, +2.6% y/y; prev +0.2% m/m, +2.7% y/y)
•09:55 Michigan Sentiment (pJul) (mkt 73.4, prev 73.2)

EVENTS

•11:00 Fed outright Treasury coupon purchase (02/15/2036 – 05/15/2042) (e: $1.50 – $2.00 bln)
•13:20 FRB Atlanta’s Lockhart (voter, moderate) on the regional economy; Jackson, MS

ISSUANCE

•No Treasury issuance activities scheduled

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