US sells 10-year notes 1.5230% vs 1.5143% pre-sale

Results of the $38 billion reopening

  • WI at 1.520% vs 1.515% on the bid/offer ahead of the sale
  • 1.5143% was the yield in the same issue ahead of the sale
  • Bid to cover 2.38
  • Prior bid to cover was 2.37
There was a pretty big bid in bonds ahead of the sale and the yield fell to the lows of the day, which is counter-intuitive to what everyone feared. The results have been lackluster and a 1 bps tail could cause some worries but when you compae it to the pre-auction move, it’s tame.
I think the market will shrug this off. Onto 30s tomorrow.

US 10 year yield tips into negative territory

Yield moves toward the low for the day at 1.5177%

The U.S. Treasury will auction off $38 billion of 10 year notes at 1 PM ET. Ahead of that auction, the 10 year yield has recently moved back down into negative territory for the day. It currently trades at 1.523%, down -0.3 basis points. The low yield for the day was earlier at 1.5177%. The high yield for the recent cycle move higher reached 1.6238% on Friday.
Yield moves toward the low for the day at 1.5177%_
The move lower has pushed the yield further away from its 100 hour moving average at 1.5513%. Yield has been trading above and below that moving average over the last two trading days as traders ponder if yields have gone far enough.
Technically, although below its 100 hour moving average, the yield remains above a trendline on the hourly chart at 1.5069%, and the rising 200 hour moving average at 1.4966%. Back on March 2, the yield tested that 200 hour moving average for the first time since February 11, and found support. The yield has not closed below its 200 hour moving average since February 1, 2021.
The tech heavy NASDAQ has been particularly sensitive to interest rates of late. As a result, the auction at 1 PM will be key for that index. It remains above its 50 hour moving average at 13063.82, but below its 100 hour moving average at 13297.60 (currently trading at 13136.50)

Major European shares close higher on the day

German DAX closes at all-time high for the third consecutive day

The major European indices are closing higher for the third consecutive day.  The German DAX closes at all-time high once again (3rd day in a row).
The provisional closes showing
  • German DAX, +0.7%
  • France’s CAC, +1.1%
  • UK’s FTSE 100, unchanged
  • Spain’s Ibex, +0.18%
  • Italy’s FTSE MIB, +0.4%

A snapshot of the Forex market shows the NZD is the strongest, while the CHF is the weakest. The USD has been waffling between marginally higher and marginally lower in trading today.

In other markets:
  • Spot gold is riding up and down with the US dollars.  It currently is up $0.65 or 0.04% at $1717.
  • Spot silver is up 3.8 cents or 0.15% at $25.97
  • WTI crude oil futures are down $0.51 among 0.81% at $63.49
  • Bitcoin is trading up $2270 or 4.18% of $56,600
In the US that market, yields are marginally higher with the biggest jump in the 30 year bond yield. It currently trades up 2.9 basis points at 2.26%.
The U.S. Treasury will auction off 10 year notes at 1 PM. The current yield is at 1.5369%, up 1.06 basis points. Tomorrow they will auction off 30 year bonds.
In the US stock market, the down industrial average is taken over as the strongest of the three major indices. The NASDAQ index is the least favorable once again as rotation at of the tech into the cyclicals resumes.
  • S&P index up 24 points or 0.62% at 3899.21
  • NASDAQ index up 28 points or 0.22% 13102.67
  • Dow up 386 points or 1.21% at 32220

GameStop back at it again as pre-market trades up 18%

That puts it on track for the highest open since 1 February

As much as the rebound in tech yesterday was impressive, GME is doing its thing again as it shoots higher in pre-market trading once more today.
As of the close yesterday ($246.90), the price of the stock has jumped by nearly 143% for the month of March itself. And that looks set to continue again today.
For all the focus on Treasury yields and the broader risk sentiment in the past few weeks, it’s still a meme world in some quarters of the market.  ¯\_(ツ)_/¯

China February M2 money supply +10.1% vs +9.4% y/y expected

Latest Chinese credit data for February has been released – 10 March 2021

  • Prior +9.4%
  • New yuan loans ¥1,360.0 bn vs ¥950.0 bn expected
  • Aggregate financing ¥1,710.0 bn vs ¥910.0 bn expected

Broad money growth kept on the higher side last month as Chinese authorities worked to keep liquidity and credit at sufficient amid the Lunar New Year holiday period. There isn’t much change to the big picture view though, as authorities are still trying to strike a fine balance in keeping a healthy supply of credit while keeping up deleveraging efforts.

Treasury yields keep a little higher to start the session

The overall market mood remains more tentative though

The 10-year Treasury auction will be a key focus point in the market today and until then, we may get very little clues on which direction investors will be leaning on today.
10-year yields are up 2.5 bps to 1.55% at the highs for the day but are still keeping lower relative to levels seen earlier on Monday this week, closer to 1.60% at the time.
Elsewhere, US futures have trimmed declines to stay little changed now while the dollar is holding slight gains but not really pushing the agenda all too much on the session.
It is shaping up to be one of those days where the market will only start to get busy once we clear event hurdles in US trading – being US CPI data and the Treasury auction.

More on China’s yearly GDP targets … clearing the confusion?

Chinese media (Caixin) with a piece saying that despite the government not proposing to set targets for 2021 through 2025, targets have not been wholly scrapped.

Referring to remarks from Hu Zucai, deputy head of the National Development and Reform Commission.
HU says a numerical target for GDP growth has been abandoned. On the other hand, Premier Li Keqiang told the annual meeting of the National People’s Congress on Friday that the government is proposing a GDP growth target of “above 6%” for 2021. Which sounds like a target to me?
Anyway, back to Hu:
  • There are other quantified targets — indicators like unemployment and carbon emissions that carry implications for the overall economic growth rate. The aim is to keep average annual growth in a “reasonable range” and to set a goal each year that is appropriate for the country’s economic situation at the time, he said, citing the draft outline of the plan.
  • Policymakers are aiming to keep the increase in annual GDP in line with the economy’s potential growth rate, Hu said
Here is the link for more (may be gated). See if you can make sense of it.
Chinese media (Caixin) with a piece saying that despite the government not proposing to set targets for 2021 through 2025, targets have not been wholly scrapped.
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