Market Roundup: Tsy Yields Continued Fall

Tsy yields revisited midday lows in late trade, 30YY slipped to 2.0660%L, 2.1157% last (-.0454); 10YY 1.6800L, 1.7173% last -.1077.

• Knock-off affect of Russia's ground war in Ukraine and subsequent wide-ranging sanctions are leaving their mark. Induced stagflation?
• Hearing growing opinion that current events will/may derail central bank plans to hike rates as risk-off/safe-haven buying forces yields lower -- while economic growth falters due knock-off effects of sanctions on Russia having broader ripple effect on food and gas prices.
• Concerns over the Russia/Ukraine conflict getting worse/out of hand quickly more likely the main safe-haven driver -- not a more considered (esoteric) front-running of period of stagflation.
• In the meantime, shares of global banking, shipping, oil producers/distributors, defense contractors alternately being pulled higher/lower due to positive/negative risk exposure to Russia sanctions as well.
• Two days of falling Treasury yields and heavy buying in short end Eurodollar futures (Whites: EDH2-EDZ2 +0.19-0.22; Reds: EDH3-EDZ3 +0.430-0.470) has provided enough of a shift in narrative to draw traders off the sidelines Tuesday. By the close, chances of no hike by the Fed this month had risen to 12%.
• The 2-Yr yield is down 10.8bps at 1.3248%, 5-Yr is down 15.1bps at 1.5665%, 10-Yr is down 10.9bps at 1.7156%, and 30-Yr is down 6.4bps at 2.097%.