Free Trial

Some Early Asia Chop

US TSYS

As mentioned elsewhere, T-Notes traded firmer at the re-open, printing through Tuesday's high. There is also some focus on what appears to be the FT re-hashing a week-old study questioning the efficacy of the Pfizer vaccine vs. some COVID mutations, with the ensuing move retracing as it becomes more widely apparent that this is old news. T-Notes last +0-05+ at 135-19, pulling back from best levels.

  • The belly of the curve outperformed on Tuesday, with 7s richening by ~3.0bp, while the longer end underperformed as 30s cheapened by a little less than 1.0bp come the close, with some chop evident surrounding comments from Fed Chair Powell.
  • Powell managed to strike a fine balance, not pushing back against recent market moves, while reiterating the broader dovish stance evident at the Fed. As a reminder, the prepared remarks (released at the backend of last week) reiterated the notion that "the economy is a long way from our employment and inflation goals, and it is likely to take some time for substantial further progress to be achieved." With Powell stressing that QE will continue at its current pace "until substantial further progress has been made toward our goals." The Q&A saw the Fed Chair comment on the recent movement in Tsy yields: "In a way, it's a statement on confidence on the part of markets that we will have a robust and ultimately complete recovery."
  • 2-Year supply saw a 0.1bp tail, with below average cover and below average dealer takedown, stopping at a record low yield.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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.