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Treasury Futures Head Lower On A Weak 7yr Auction, Curve Steepens

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Treasuries continued their bear-steepening move on Wednesday with another auction causing weakness out the curve. The 7y note auction extended a string of weak sales this week, the soft sale saw the 7y yield touch 4.6537% and dragged the 10y to 4.6357% - the highest levels since early May.

  • Treasury futures were lower on Wednesday, grinding slightly lower throughout the Asian session, before a larger move lower ahead of the treasury auction. TU was (-01.875) at 101-11.75, was off lows of 101-10.625, while the longer-end sold off with TY (-17) at 107-24+ vs lows of 107-21+.
  • Cash treasury curve bear-steepened again on Wednesday, yields were 1-7bps higher, the 2Y +1.7bps to 4.973%, the 10Y +6.2bps at 4.612% while the 2y10y was +6.776 at -36.296 and now 12bps off lows from May 28th.
  • (MNI) Fed’s Next Move Could Still Be A Hike-Posen - (See link)
  • Fed rate pricing was little changed across the session, with the bulk of the price action taking place in the longer-end of the curve. ~13bps for September and a cumulative 32bps of cuts priced into year-end.
  • Looking ahead; GDP, Personal Consumption, Jobless Claims, Wholesale Inventories & PEnding Home Sales
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Treasuries continued their bear-steepening move on Wednesday with another auction causing weakness out the curve. The 7y note auction extended a string of weak sales this week, the soft sale saw the 7y yield touch 4.6537% and dragged the 10y to 4.6357% - the highest levels since early May.

  • Treasury futures were lower on Wednesday, grinding slightly lower throughout the Asian session, before a larger move lower ahead of the treasury auction. TU was (-01.875) at 101-11.75, was off lows of 101-10.625, while the longer-end sold off with TY (-17) at 107-24+ vs lows of 107-21+.
  • Cash treasury curve bear-steepened again on Wednesday, yields were 1-7bps higher, the 2Y +1.7bps to 4.973%, the 10Y +6.2bps at 4.612% while the 2y10y was +6.776 at -36.296 and now 12bps off lows from May 28th.
  • (MNI) Fed’s Next Move Could Still Be A Hike-Posen - (See link)
  • Fed rate pricing was little changed across the session, with the bulk of the price action taking place in the longer-end of the curve. ~13bps for September and a cumulative 32bps of cuts priced into year-end.
  • Looking ahead; GDP, Personal Consumption, Jobless Claims, Wholesale Inventories & PEnding Home Sales