Halister News

Information from person familiar with the matter, who is not authorized to speak publicly and asked not to be identified. --GREG CHANG

See {NSN O2QW7DBE5TS2 } for the Government Web Content - US press release.

(Bloomberg) -- Initial jobless claims seen at 275k in week ended Feb. 13 (forecast range 255k to 285) vs 269k previous week.

• Claims averaged 278k in 2015; last yr’s low, 255k in week ended July 17, was lowest in more than four decades vs recession high 665k in week ended March 27, 2009
• Philadelphia Fed Business Outlook Survey seen at -3 in Feb. vs -3.5 in Jan. (forecast range -7.5 to +1); diffusion index represents percentage of respondents indicating increase minus percentage indicating decline
  • Range over past decade is -40.9 (Nov. 2008) to 36.6 (March 2011)

(Bloomberg) -- “For the next two months, 1.05%-1.55% is quite possible on 5s,” and “although bond markets are quiet this week -- with subdued volume in the face of bounces in stocks and oil -- investors can’t be complacent about the near-term influence of a Fed that feels itself slipping behind the curve,” FTN strategist Jim Vogel says in note.

• Intermediate yields “allow for two rate increases this year, including a move to 0.75% at the June meeting,” and “5-yr remains more volatile as it will react quickly to any hints at the March FOMC that ‘skipping’ that meeting merely represents a pause rather than any change in fundamental policy”
• “Support levels for 5s and 10s are coming into perspective at 1.35% and 1.87%, respectively”
• Other observations from strategist morning notes:
• BMO (Aaron Kohli): “Significant size cuts in TIPS evoke the question of whether” today’s $7b 30Y TIPS auction “will be easier for the market to absorb or whether the size cuts will simply feed a self-sustaining cycle of reduced liquidity and more volatile auction outcomes”
• CRT (Ian Lyngen): “Bearish bias in the Treasury market has paused, although it’s far less evident that a bounce in the next leg –- in fact, a simple consolidation coupled with another move higher in risk assets will put support in 10s at 1.89% easily within range”
  • “We’re content to let the bearish call remain in place for now, with the caveat that we’d cover in shorts the further beyond 1.89% yields go and would frankly be surprised to see 2.00% 10-years without a meaningful pause/consolidation”
  • “Improved odds of further tightening are about more than simply the Fed minutes and recent commentary; in fact, the performance of risk assets suggests the market’s focus remains primarily on the development of financial conditions as a barometer for Fed expectations”
• RBS (John Briggs): “If one takes out the fundamental aspect and looks only at the charts, the market’s collective intelligence on the value of an asset at any one time, the weekly reversal patterns seen in Treasury yields (shown earlier this week), S&Ps and even TIPS shows a medium-term bottom in all the above is forming”