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Futures Re-Open Little Changed After A Heavy Tuesday

US TSYS
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TYM4 is trading at 107-15, +0-00+ from NY closing levels.

  • This comes after US tsys and US equities were pressured again by stronger-than-expected inflation data and tumbled ahead of the FOMC meeting today. The unexpected strength in inflation-related data added weight against any potential rate cuts.
  • Reflecting this sentiment, the 2-year yield climbed by 6bps, closing at 5.04%. This marked the first time since November 13th that it surpassed the 5% threshold on a closing basis. Amid speculations of prolonged elevated rates, the belly of the yield curve exhibited weakness, with the 5-year maturity experiencing a more than 7bps uptick to 4.715%. Similarly, the 10-year rate increased by 7bps to 4.68%, just shy of the 4.70% mark.
  • The employment cost index (ECI), which is closely monitored by the Federal Reserve, rose by 1.2% in Q1 versus +0.9% est.
  • Broader macro considerations will have to wait until Thursday's Q1 preliminary release for productivity. Strong productivity gains have offset labour costs in recent quarters but consensus sees productivity growth tailing off to 0.7% annualised in Q1.
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TYM4 is trading at 107-15, +0-00+ from NY closing levels.

  • This comes after US tsys and US equities were pressured again by stronger-than-expected inflation data and tumbled ahead of the FOMC meeting today. The unexpected strength in inflation-related data added weight against any potential rate cuts.
  • Reflecting this sentiment, the 2-year yield climbed by 6bps, closing at 5.04%. This marked the first time since November 13th that it surpassed the 5% threshold on a closing basis. Amid speculations of prolonged elevated rates, the belly of the yield curve exhibited weakness, with the 5-year maturity experiencing a more than 7bps uptick to 4.715%. Similarly, the 10-year rate increased by 7bps to 4.68%, just shy of the 4.70% mark.
  • The employment cost index (ECI), which is closely monitored by the Federal Reserve, rose by 1.2% in Q1 versus +0.9% est.
  • Broader macro considerations will have to wait until Thursday's Q1 preliminary release for productivity. Strong productivity gains have offset labour costs in recent quarters but consensus sees productivity growth tailing off to 0.7% annualised in Q1.