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US TSYS: Treasuries Well Bid, Curves Bull Flatten Ahead Friday's Employ Data

US TSYS
USBulletMarketsFixed Income BulletsNorth America
  • Treasuries look to finish near late session highs Wednesday, lower than expected ISM Services data spurring heavy buying across the board - ISM Services missed expectations at 52.8 (54.0 expected, 54.0 prior), with pullbacks prevalent in some key categories.
  • ADP employment was stronger than expected in January at 183k (cons 150k) along with a solidly upward revised 176k (initial 122k) in Dec. Meanwhile, December's goods and services trade deficit was slightly wider than thought at $98.4B.
  • No change to Treasury guidance on future issuance in the February Refunding policy statement, a modest dovish surprise vs many expectations that it would be watered down.
  • The Mar'25 10Y contract has nearly made it back to pre-Dec 18 FOMC levels, topping at 109-29 high before slipping back to 109-24 (+17.5) after the bell. Curves bull flattened, 2s10s -6.344 to 23.336, 5s30s -2.856 at 39.718; 10Y yield slipped to session low of 4.4001%.
  • The Greenback traded weaker on the data (BBDXY off lows at 1297.89 -2.69), Yen outperformance remained the key feature of the day in G10 currency markets, underpinned by the stronger-than-expected Japanese wage data.
  • Additional cross asset moves, Gold hit new all-time high of 2882.29, Crude turned lower (WTI -1.49 at 71.21), Stocks reversed early weakness (SPX Eminis +12.0 at 60.75 vs. 6020.25 overnight low.
  • Focus remains on Friday's headline employment data for January.
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  • Treasuries look to finish near late session highs Wednesday, lower than expected ISM Services data spurring heavy buying across the board - ISM Services missed expectations at 52.8 (54.0 expected, 54.0 prior), with pullbacks prevalent in some key categories.
  • ADP employment was stronger than expected in January at 183k (cons 150k) along with a solidly upward revised 176k (initial 122k) in Dec. Meanwhile, December's goods and services trade deficit was slightly wider than thought at $98.4B.
  • No change to Treasury guidance on future issuance in the February Refunding policy statement, a modest dovish surprise vs many expectations that it would be watered down.
  • The Mar'25 10Y contract has nearly made it back to pre-Dec 18 FOMC levels, topping at 109-29 high before slipping back to 109-24 (+17.5) after the bell. Curves bull flattened, 2s10s -6.344 to 23.336, 5s30s -2.856 at 39.718; 10Y yield slipped to session low of 4.4001%.
  • The Greenback traded weaker on the data (BBDXY off lows at 1297.89 -2.69), Yen outperformance remained the key feature of the day in G10 currency markets, underpinned by the stronger-than-expected Japanese wage data.
  • Additional cross asset moves, Gold hit new all-time high of 2882.29, Crude turned lower (WTI -1.49 at 71.21), Stocks reversed early weakness (SPX Eminis +12.0 at 60.75 vs. 6020.25 overnight low.
  • Focus remains on Friday's headline employment data for January.