US TSYS: Paring Gains, Flash PMIs Ahead, Trump Welcomes Xi Tonight
Treasuries are mildly firmer, near recent lows with curves bull flattening: 2s10s at late February 2025 levels. Similar moves in EGBs following hawkish flash PMIs and softer crude prices. Oil decline as talks continue on sidelines following yesterday's UN gathering - US special envoy Witkoff said that lengthy talks have taken place with the Iranian delegation through mediators and they are set to continue. Modest US data calendar and Fed speak ahead. * Cash yields off lows - near flat across the curve at the moment. * 2s10s curve currently -1.703 at 18.653 vs. 17.030 lows - lowest since February 26, 2025. * TYZ6 trades at 106-01 (+01) on moderate volumes of 325k, narrow overnight ranges of 106-00 to 106-08.5. * TYZ6 remains in consolidation mode - for now. The latest pause means price continues to trade closer to its recent levels and the sideways move highlights a flag formation - a bearish continuation pattern. This reinforces a bearish theme. A resumption of the downtrend would open 105-10+, the Oct 19 '23 low on the continuation chart. Initial firm resistance is 106-24+, at the 20-day EMA * Data: MBA Mortgage Applications (0700ET), S&P Global US flash PMIs (0945ET). * Fedspeak
Treasuries are mildly firmer, near recent lows with curves bull flattening: 2s10s at late February 2025 levels. Similar moves in EGBs following hawkish flash PMIs and softer crude prices. Oil decline as talks continue on sidelines following yesterday's UN gathering - US special envoy Witkoff said that lengthy talks have taken place with the Iranian delegation through mediators and they are set to continue. Modest US data calendar and Fed speak ahead.
* Cash yields off lows - near flat across the curve at the moment. 653 vs. 030 lows - lowest since February 26, 2025. 5.
* TYZ6 remains in consolidation mode - for now. The latest pause means price continues to trade closer to its recent levels and the sideways move highlights a flag formation - a bearish continuation pattern. This reinforces a bearish theme. A resumption of the downtrend would open 105-10+, the Oct 19 '23 low on the continuation chart.
Initial firm resistance is 106-24+, at the 20-day EMA * Data: MBA Mortgage Applications (0700ET), S&P Global US flash PMIs (0945ET). * Fedspeak: Fed Gov Barr on housing (text, mediated Q&A at 1005ET), Chicago Fed Goolsbee podcast interview (1200ET). * Coupon issuance: US Tsy $28B 2Y FRN re-open (91282CRD5) auction (1130ET) followed by US Tsy $70bn 5Y notes - 91282CRN3 (1300ET). 393% high yield vs.
37x bid-to-cover vs. 32x 5-auction avg). * Bill issuance: US Tsy $72bn 17W bills (1130ET) * Politics: President Trump returns from NY, will participates in an Arrival Ceremony with the President of the People's Republic of China at 1800ET.