HALISTER1: UST MORNING CALL: FOMC Uncertainty Obscures Curve Direction

UST MORNING CALL: FOMC Uncertainty Obscures Curve Direction

(Bloomberg) -- USTs edge higher in Asia, then see subdued session in London; belly of the curve underperforms in early New York trading ahead of 5Y supply.
  • Expect some strength in the durable goods report, look for new orders to rise 1.9%; 5Y supply to require some concession, expect rates remain range-bound ahead of FOMC, JPMorgan’s Jay Barry writes in a client note
  • RBS likes going long against 1.95% lvl in 10s, with a closing stop over 2%; Fed not expected to signal anything for June, strategist John Briggs in client note
  • Ahead of FOMC, market hesitant on direction of curve; 2s5s at top-end of range, momentum indicators approaching too steep conditions; favor risk/reward of a less dovish Fed flattening the curve, BMO’s Aaron Kohli writes in a client note
  • Technicals
    • Support: 128-31/128-26 (March 28 low, 76.4% Fibo of March 16 rally), 128-20+/128-21 (March 23 low, 100-DMA)
    • Resistance: 129-22+ (April 25 high), 129-25 (April 22 high), 129-29 (April 21 high), 130-02+ (April 20 mid price)
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Aaron Kohli (Bank of Montreal)
Jay Barry (JPMorgan Chase & Co)
John Briggs (RBS Securities Inc)

To de-activate this alert, click here

UUID: 7947283