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Higher, But Off Best Levels


Coiling Ahead Of U.S. CPI.


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Familiar Omicron Worry Provides A Bid

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Long end Treasury yields continued to retrace lower overnight Tuesday, with 10Y and 30Y yields at their lowest in a week in a bull flattening move. The front-end/belly are steady ahead of 2Y supply.

  • The 2-Yr yield is up 0.8bps at 0.4437%, 5-Yr is up 0.2bps at 1.1729%, 10-Yr is down 1bps at 1.6203%, and 30-Yr is down 1.3bps at 2.0683%.
  • Dec 10-Yr futures (TY) up 1.5/32 at 130-19.5 (L: 130-14.45 / H: 130-22.5). Light volumes (~250k), and less exciting overnight than equities (S&P eminis at fresh all-time highs).
  • On the data schedule today is housing data (FHFA and S&P CoreLogic prices at 0900ET, and New Home Sales at 1000ET), along with 1000ET's releases of Conference Board Consumer Confidence and Richmond Fed Manufacturing.
  • Supply consists of $40B 48-day bill auction at 1130ET, and $60B in 2Y Note auction at 1300ET.
  • Plenty of attention on Capitol Hill with reconciliation / infrastructure legislation in the balance: the House Democratic Caucus meets and Senate Democrats and Republicans hold party lunches.
  • NY Fed buys ~$1.225B of 7.5-30Y TIPS.