Free Trial

Curve Consistently Steeper

US TSYS
Inside range for Tsys after the bell, curves steeper (2s10s +5.282 at -24.663) with bonds weaker but off early session lows (30YY currently 3.2584% vs. 3.2840% high / 3.1995% low).
  • Steeper curves the consistent theme on the day as futures see-sawed on the day, heavier volumes (TYU2>1.7M) more tied to Sep/Dec rolls rather than data that kicked things off.
  • Tsys extended highs overnight after soft European PMIs (France, Germany, EU in line or better than estimated but still sub-50, mixed UK w/ Mfg 46.0 vs. 51.0 est, Services 52.5 vs. 51.6 est) - only to extend session lows (no obvious headline driver) in the lead-up to US PMIs.
  • Tsys have rebounded back near overnight highs, yield curves bull steepening (2s10s +3.648 at -26.297) after US PMIs come out weaker than estimated, particularly Services (44.1 vs. 49.8 est). Further impetus from slump in New Home Sales for July: 511k vs. 575k est, and 590k prior.
  • Tsy futures pare gains yest again after $44B 2Y note auction (91282CFG1) tailed: 3.307% high yield vs. 3.290% WI; 2.49x bid-to-cover vs. 2.58x prior.
  • Focus remains on KC Fed's annual Jackson Hole Economic Symposium: Reassessing Constraints on the Economy and Policy, starts Friday w/ Chairman Powell speaking at 1000ET (0800 local), text is expected but no Q&A. Markets keen on pivot after cooling data or will the Fed maintain hawkish stance to squelch inflation.
  • Currently, The 2-Yr yield is down 1.2bps at 3.2975%, 5-Yr is up 1.8bps at 3.1753%, 10-Yr is up 3.2bps at 3.0461%, and 30-Yr is up 2.5bps at 3.2508%.

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.