HALISTER1: UST MORNING CALL: Treasuries Steady; BMO Sees Pressure on Rates

UST MORNING CALL: Treasuries Steady; BMO Sees Pressure on Rates

(Bloomberg) -- Treasuries little changed overnight as risk assets stabilize, while bund futures are range-bound.
  • No data, Fed speak, expect a light inside day of activity, continue to lean bearishly though without great conviction, CRT’s David Ader writes in a client note
  • Looming Fed meeting and uncertainty over communication may be behind the less-than-expected dip-buying into UST weakness, RBS’ John Briggs and Blake Gwinn write in a client note; look to take advantage of further sell-off ahead of FOMC meeting
  • Issues maturing July, Sept. 2017 trade ~0.7bp cheap to fitted curve; sector offers value at current levels, given positioning is now more balanced, writes JPMorgan’s Jay Barry in a client note
  • Near-term dynamics favor more pressure on US rate, particularly if FOMC leaves potential for June increase, like selling front-end, 3Y for short-term trade, writes BMOs Aaron Kohli in a client note
  • Technicals
    • Resistance 129-29 (April 21 high), 130-02+ (April 20 mid price), 130-06+ (April 14 low)
    • Support 129-14+ (April 21 low), 129-09 (61.8% Fibonacci), 128-31 (March 28 low)
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Aaron Kohli (Bank of Montreal)
Blake Gwinn (RBS Securities Inc)
David Ader (CRT Capital Group LLC)
Jay Barry (JPMorgan Chase & Co)
John Briggs (RBS Securities Inc)

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