TREASURY WRAP: T-NOTE (H3) FUTURES SETTLE 8 TICKS LOWER AT 114-19+

Analysis details (20:20)

Treasuries were sold into the weekend in lack of fresh catalysts as participants position into FOMC week. 2s +2.9bps at 4.207%, 3s +2.3bps at 3.906%, 5s +3.3bps at 3.621%, 7s +3.3bps at 3.576%, 10s +2.5bps at 3.516%, 20s +0.5bps at 3.764%, 30s +0.4bps at 3.632% 

Inflation breakevens: 5yr BEI -0.1bps at 2.315%, 10yr BEI -0.7bps at 2.330%, 30yr BEI -0.9bps at 2.325%.

THE DAY: Govvies trundled lower through the APAC and European session on Friday with catalysts on the light side barring the firmer-than-expected Tokyo CPI report. The solid 7yr auction on Thursday, which marked the first month of no coupon auction tails since 2016, failed to sustain strength into Friday. T-Notes made session lows of 114-12 ahead of US players arriving. PCE data confirmed expectations for a fall, with shorts covering in reaction, seeing T-Notes pare losses. However, 114-21+ served as resistance with the contracts hovering beneath into settlement. The nudge lower in the UoM survey consumer inflation expectations didn't make much difference either. 

NEXT WEEK: Treasury participants now enter a hairy period with next week's Employment Cost Index on Tuesday, followed by FOMC, refunding, and ISM mfg. all on Wednesday, then payrolls and ISM Services on Friday.

STIRS:

• SR3H3 +0.0bps at 95.815, M3 -0.5bps at 96.560, U3 -2.0bps at 96.720, Z3 -3.0bps at 96.810, H4 -4.5bps at 96.860, M4 -6.0bps at 96.885, U4 -5.0bps at 96.895, Z4 -4.0bps at 96.885, H5 -3.5bps at 96.865, H6 flat at 96.675, H7 flat at 95.545.


• NY Fed RRP op demand at USD 2.004tln (prev. 2.024tln) across 96 bidders (prev. 97).

27 Jan 2023 - 20:20- Fixed IncomeData- Source: Newsquawk