E-mini S&P 500 Futures (March): Settled at 3819.25, down 19.75
E-mini Nasdaq-100 Futures (March): Settled at 12,297.25, down 366.50
U.S. benchmarks pointed sharply higher ahead of the bell and tech led the way. The Nasdaq was the worst performer yesterday and settled at the lowest level since November 30th. The Treasury complex is certainly aiding the rebound as the 10-year Note backs off to 1.53% from a high of 1.62%, ahead of a deluge of auctions through the next 3 days.
Today, $58 billion in 3-year Notes will be auctioned at noon CT, $38 billion in 10-years will be auctioned tomorrow, and $24 billion 30-years on Thursday. Historically speaking, these are large amounts.
Furthermore, the perpetual printing adds up. However, compared to recent auctions, such as the $62 billion in 7-year Notes on February 25th that cratered the bond market (sending yields soaring), this week’s added supply is arguably watered down.
Weakness from Fed Chair Jerome Powell last Thursday carried into yesterday, but the curve flattened sharply with 5-years Note futures losing about 10 ticks compared to only 5 ticks from the 30-year Bond.
The flattening, partly a product of a technical rejection and partly ahead of tomorrow’s CPI data, coupled with the more manageable supply this week, has encouraged a consolidation across rates and is exactly what Powell said the Fed wasn’t thinking about artificially controlling. This move has carried into today and is supportive to risk-assets.
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