Model Alert Update
January 25, 2024
A quick follow-up update on a few things that have been flagging up as of yesterday’s close. Bonds.
We saw a late weakness yesterday, following a stronger Services PMI, which surprised on the upside at 52.9 vs 51.5 expected. However, services employment fell to 50.8, the lowest reading since August and the second lowest in a year. The Treasury sell-off wasn’t helped by a weak UST 5-year auction, which tailed by 2 bps.
Meanwhile, the Dollar index had its worst day since mid-December, as positive risk appetite gathered further momentum after more upbeat tech earnings and Chinese policy support.
With upcoming claims, GDP and PCE data tomorrow, let’s have a look at where things stand in bond land and what else might have been triggered since the last update yesterday.