The US cash Treasury tape reopens Monday July 20 at 8:00 ET into the first full FOMC blackout window ahead of the Wednesday July 30 decision, with no live Fed speakers on the calendar through the 2:30 ET Powell press conference. Three back-of-June and top-of-July regional data points land in a two-hour Monday window: the Chicago Fed National Activity Index for June at 8:30 ET, the Conference Board Leading Economic Index for June at 10:00 ET, and the Dallas Fed Texas Manufacturing Outlook for July at 10:30 ET. The two-year Treasury closed Friday July 17 at 3.43 percent, down nine basis points on the week. Fed-funds futures priced the September 17 cut at 99 percent and the December 10 second cut at 65 percent. Monday reads as a position-setter into Tuesday’s Philadelphia Fed non-manufacturing survey at 8:30 ET and the 69 billion two-year Treasury auction at 1:00 ET.

The pre-open band the two-year has to hold

Sunday Globex ran the two-year futures inside an implied cash-equivalent yield band of 3.42 to 3.45 percent, tighter than the Friday close. The band compression is the blackout-week signature: no discretionary Fed-speak flow, no scheduled auction supply until 1:00 ET Tuesday. A break of the 3.46 percent ceiling on the pre-print tape walks the December second cut back toward the 60 percent band and reads as fade at the priced-in soft-landing trade. A break of the 3.41 percent floor pushes the December second cut through the 68 percent line and reads as continuation of the June CPI repricing that carried through last week.

The ten-year closed Friday at 4.06 percent with the 2s10s at 63 basis points. The curve carried one basis point flatter on the week against a September cut that is fully priced. The December 2027 SR3 contract implied a terminal rate of 3.16 percent, thirteen basis points lower on the week. The DXY closed at 100.9.

Chicago Fed National Activity Index at 8:30 ET

The CFNAI for June lands at 8:30 ET from the Federal Reserve Bank of Chicago. The May print at plus 0.03 held the three-month moving average at minus 0.05, inside the minus 0.10 to plus 0.05 band the desk reads as the below-trend but not recessionary corridor. The production-and-income category contributed plus 0.08 to the May headline; the employment-unemployment-and-hours category contributed minus 0.03; the sales-orders-and-inventories category contributed zero; the personal consumption and housing category contributed minus 0.02.

The line the strip reads on the CFNAI is the three-month moving average, not the single-month print. A June headline that pulls the three-month average under minus 0.10 signals below-trend growth wide enough to align with the September cut. A print that pulls the average back above zero contradicts the labor-cooling framing that carried the June PPI signal.

Conference Board Leading Economic Index at 10:00 ET

The LEI for June lands at 10:00 ET. The May print at minus 0.1 percent month-over-month held the twelve-month diffusion index at 48, one point above the 47 recession-signal threshold the Conference Board publishes as its coincident-recession band. The May six-month annualized rate at minus 2.8 percent compressed from the minus 3.1 percent April read.

The lines the strip reads on the LEI are average weekly manufacturing hours (held at 40.2 hours through May) and the ISM new orders diffusion contribution. A June print at zero or better, with the six-month annualized rate compressing above minus 2.5 percent, folds cleanly into the soft-landing framing that carried through the June SEP. A print at minus 0.3 percent or worse, with the six-month rate widening to minus 3.0 percent, adds a data point for the strip to carry the 65 percent December second cut through the July 30 FOMC statement.

Dallas Fed Texas Manufacturing Outlook at 10:30 ET

The Dallas Fed Texas Manufacturing Outlook for July lands at 10:30 ET. The June general business activity index printed minus 12.7, twelfth consecutive negative read, though narrower than the minus 15.3 May print. The new orders line at minus 8.1 stayed negative but narrower than the minus 10.4 May read. The prices paid for raw materials line at plus 28.4 held elevated, six points above the twelve-month median.

The line the strip reads on the Dallas Fed is the new orders gap against the prices paid line. A July new orders print above minus 5 with a prices paid line falling under 25 confirms the manufacturing-side softening that the June ISM new orders diffusion signaled. A new orders line back below minus 10 with prices paid holding above 28 points at goods-side stagflation compression and complicates the July 30 statement language on the goods-and-services split in core inflation.

Where the September cut sits going in

The September cut is priced at 99 percent. The strip does not carry a live path to move that line inside blackout. The trade is on the December 10 second cut probability at 65 percent, up ten points on the week and past the 50 percent threshold the desk reads as the market having crossed the line from single-cut into a two-cut year.

Three Monday prints do not, in isolation, move the December second cut probability by more than one to two points on the intraday tape. The value of Monday is the cumulative read: three below-trend prints in a row (CFNAI headline negative, LEI at minus 0.2 percent or worse, Dallas Fed new orders back below minus 10) walk the second-cut probability toward the 68 to 70 percent band. Three above-trend prints in a row walk it back toward 60 percent.

Monday as a position-setter for Tuesday

The Philadelphia Fed non-manufacturing survey for July lands Tuesday July 21 at 8:30 ET. The two-year Treasury auction at 1:00 ET Tuesday sizes 69 billion, first supply print of the blackout week. The Monday close sets the position the strip carries into that combination.

The June auction of the two-year stopped through the when-issued yield by 0.3 basis points with a bid-to-cover at 2.75 and indirect bidders at 78.1 percent, both inside the twelve-auction average. A July stop-through inside 0.5 basis points with indirect bidders at or above 78 percent confirms the front-end demand tone the strip carried through the June CPI print. A tail of 0.5 basis points or wider signals fade at the priced-in front end and complicates the September-cut size question inside the residual 10 basis point overweight the September SR3 contract carries.

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