MNI: PBOC Net Drains CNY103.5 Bln via OMO Friday

MNI: PBOC Sets Yuan Parity Lower At 7.1901 Fri; -2.13% Y/Y

MNI BRIEF: China's LPR Holds Steady In Dec

MNI: BANXICO CUTS RATES BY 25BPS TO 10.0% AS EXPECTED

MNI BRIEF: Fed To Expand SRF Around Year-End Market Pressures

MNI CNB WATCH: Rate Held At 4.0%; Inflation Rise 'Temporary'

MNI: US TSY TICS NET FLOWS IN OCT +$203.6B

EZ/UK Bond Supply Calendar: AS, UK, DE Auction on Jan 7

EZ/UK T-Bill Calendar: 1/3/6-Month UKTB Auction on Friday

MNI EXCLUSIVE: EU-Mercosur Deal Close, But Likely Short-Lived - Officials

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

© 1982-2024 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

US TSYS: Hawkish Fed Vs The World Sees Treasuries Twist Steepen

US TSYS
USBulletMarketsFixed Income BulletsNorth America

The Treasury curve twist steepened Thursday, as the implications of the Fed's apparent hawkish shift continued to be digested.

  • Short-end Treasuries were an early focus, following dovish decisions overnight by the BOJ and BOE. At one point 2Y yields were 8bp below Wednesday's post-FOMC highs (they had risen 15bp on the decision), and they would held on to most of the steady declines made through Thursday's session.
  • Data had little significant impact on market pricing: continuing and initial jobless claims, final GDP growth and Q3 core PCE prices were all on the stronger side of expectations, offset somewhat by a weak Philly Fed manufacturing index.
  • Political developments arguably helped the curve steepen, with president elect Trump and his proxies discussing a government shutdown (growth negative) as well as a removal of the statutory debt limit (arguably putting focus on longer-end liabilities).
  • Unusually, nominal Treasuries weakened after a 5Y TIPS auction - but this was one of the worst such sales in years, tailing by 7bp and resulting in the belly of the nominal coupon curve briefly underperforming.
  • A large TYH5 block at 1349ET, 14.25k at 108-19+ (unconfirmed buyer) helped Treasury futures come off the lows, but that nascent rebound faded into the close.
  • Curves finished steeper, with various segments at multi-year highs.
  • Friday's schedule includes the November PCE report and the final December UMichigan survey, while we also get the first post-FOMC meeting commentary with SF's Daly and NY's Williams appearing in the morning.
  • Latest levels: Mar 10-Yr futures (TY) down 13.5/32  at 108-19 (L: 108-16.5 / H: 109-0.5). The 2-Yr yield is down 3.6bps at 4.3186%, 5-Yr is up 2.7bps at 4.4301%, 10-Yr is up 5.8bps at 4.5722%, and 30-Yr is up 6.7bps at 4.7426%.
278 words

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.

The Treasury curve twist steepened Thursday, as the implications of the Fed's apparent hawkish shift continued to be digested.

  • Short-end Treasuries were an early focus, following dovish decisions overnight by the BOJ and BOE. At one point 2Y yields were 8bp below Wednesday's post-FOMC highs (they had risen 15bp on the decision), and they would held on to most of the steady declines made through Thursday's session.
  • Data had little significant impact on market pricing: continuing and initial jobless claims, final GDP growth and Q3 core PCE prices were all on the stronger side of expectations, offset somewhat by a weak Philly Fed manufacturing index.
  • Political developments arguably helped the curve steepen, with president elect Trump and his proxies discussing a government shutdown (growth negative) as well as a removal of the statutory debt limit (arguably putting focus on longer-end liabilities).
  • Unusually, nominal Treasuries weakened after a 5Y TIPS auction - but this was one of the worst such sales in years, tailing by 7bp and resulting in the belly of the nominal coupon curve briefly underperforming.
  • A large TYH5 block at 1349ET, 14.25k at 108-19+ (unconfirmed buyer) helped Treasury futures come off the lows, but that nascent rebound faded into the close.
  • Curves finished steeper, with various segments at multi-year highs.
  • Friday's schedule includes the November PCE report and the final December UMichigan survey, while we also get the first post-FOMC meeting commentary with SF's Daly and NY's Williams appearing in the morning.
  • Latest levels: Mar 10-Yr futures (TY) down 13.5/32  at 108-19 (L: 108-16.5 / H: 109-0.5). The 2-Yr yield is down 3.6bps at 4.3186%, 5-Yr is up 2.7bps at 4.4301%, 10-Yr is up 5.8bps at 4.5722%, and 30-Yr is up 6.7bps at 4.7426%.